Question

Explain five effect of unemployment in overall economic

Answer 1

Some of the well-known effects of unemployment on the economy are:

Unemployment financial costs  :-

The government and the nation suffer. In many countries the government has to pay the unemployed some benefits. The greater the number of the unemployed or the longer they are without work the more money the government has to shell out.

Therefore, the nation not only has to deal with the lost income and decreased production but also with additional cost.

Spending power  :-

The spending power of an unemployed person and his/her family decreases drastically and they would rather save than spend their money, which in turn affects the economy adversely.

Reduced spending power of the employed :-

Increased taxes and the insecurity about their own work may affect the spending power of the working people as well and they too may start to spend less than before thus affecting the economy and also the society in a negative manner.

Recession   :-

With the increase rates of unemployment other economy factors are significantly affected, such as: the income per person, health costs, quality of health-care, standard of leaving and poverty.

Answer 2

The five effects of unemployment in overall economic are stated as follows.

Explanation:

• Rate of economy growth is minimized.
• Poor society are created due to the unemployment which later becomes a bigger threat.
• Due to unemployment the consumption and the requirements are gradually decreased due to which growth is hampered.
• And the following cause will lead to various social issues among each other.
• And eventually every other person will go into depression which is a very dangerous situation.