North Carolina's unemployment rate this year reached magnitudes not seen since the 1930s. When those reporting themselves as unemployed are grouped with those wishing full-time employment but only able to find part-time work, nearly one in five US workers are unemployed.

This has large economic costs for the state. Most fundamentally, there is the opportunity cost of unemployment: if these workers were employed, we as a state would be producing (and consuming) more goods and services. In addition, there is the cost to the state government required to balance its budget of allocating scarce government revenues to unemployment benefits.

The state's social safety net has two parts: support to those permanently unable to care for themselves, and support to those temporarily unable to care for themselves due to unemployment. These costs are countercyclical -- they rise when the economy turns to recession. Thus, when state revenues are turning down due to the recession the costs of unemployment benefits are rising.

1. Using the US definition of unemployment, are you unemployed? Why or why not?
2. How do the Federal and North Carolina governments cooperate in providing unemployment benefits to those out of work in North Carolina?
3. Is it an economic cost when the state government taxes one citizen to provide unemployment benefits to another citizen? Why or why not?
4. Do unemployment benefits discourage individuals from looking for jobs? Why or why not?
5. What impact has immigration had on unemployment during this recession?

Now that unemployment benefits are running out, the Federal and State governments will consider extensions to the current programs. Design an extension for the state of North Carolina. Provide the reasoning for creating the extension you propose -- or provide the detailed logic for denying any further extensions to these programs.