High unemployment can strain ____ budgets because there is less income tax and more people to pay assistance to. both employee and employer employee employer government
Added by Charles H.
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Step 1: High unemployment leads to less income tax revenue for the government because fewer people are working and paying taxes on their income. Show more…
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'According to early classical macroeconomics, unemployment can persist for long periods of time because wages are inflexible: can never occur: could not prevail for long; because the government intervenes to eliminate unemployment: could not prevail for long periods of time, because wages are flexible:'
Derrick D.
The type of unemployment that is linked to the business cycle is known as cyclical unemployment. This occurs when there's a downturn in the business cycle, such as during a recession. During these times, businesses might see a decrease in demand for their products or services, leading to a reduction in production. This then decreases the demand for labor, causing workers to be laid off or have difficulty finding jobs, which increases cyclical unemployment. Cyclical unemployment is directly tied to the fluctuations in the economy and is seen as a temporary form of unemployment. It tends to rise during economic downturns and fall during periods of economic growth. It's often used as an indicator of the overall health of the economy.
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A high unemployment rate tells us that a large percentage of the labor force is unemployed but not why the unemployment rate is high. What unemployment measure tells us if (i) people are searching longer than usual to find a job, (ii) more people are economic part-time workers, or (iii) more unemployed people are job losers?
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