pdf (69.4 KB) 3. In Germany and some other countries, there is a type of social insurance, funded through income taxes, where the government lets companies pay workers during recessions and the government itself picks up some of the difference, so that businesses do not have to fire and rehire employees. a. This targets which type of unemployment? b. It costs about $4,000 to hire an employee. Germany has a 60% labor force participation rate and a population of 83 million people. If unemployment increases from 5% to 10%, how much would it cost to rehire all of the workers as unemployment comes back down to 5%? c. With the social insurance program, only 1% of workers need to be rehired (unemployment increases from 5% to 6%). Instead, each worker makes $25,000 and the government gives each worker an additional $12,500. With this plan, each worker makes $12,500 less than they would when the economy is not in recession, but most keep their jobs. If they lost their jobs, they would lose $50,000. Additionally, suppose the program is financed with $5,000 per person per year in taxes, and there are 5 good years for every bad year. Is there a net economic benefit? (Hint: think about what the next best option would be). MacBook Air