Question

When critics of unemployment insurance claim that some of the unemployed are not exerting much effort to find jobs because of the unemployment benefits, they are referring to the moral hazard problem.
a. True

b. False?

Answer 1

Based on the description above, the correct answer is a, true. It is because moral hazard problem covers about or focuses more on problems of how unemployed works doesn't exert much effort because of certain factors in which one of them maybe because of the unemployment benefits that unemployed individuals receives.