Chapter 6 Wage Setting= (P^e)*F(u , z)- + By giving unemployment insurance, we keep the economy from going down the drain. If people have no money to spend, more people end up being unemployed. However, if the money paid to the unemployed is too high, then there is little incentive to go back to work. When people are “replaced” by machines, people have to be hired to maintain and create the machines. Also, whole new industries have to be created (i.e. Geek Squad).
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