Question

Unemployment leads to low income and low savings and hence low demand and lowproduction. This is the identification of a depressed economy.” Support the statement with threearguments.​

Answer 1

Answer:

Use the law of demand and supply.

Explanation:

Unemployment means non availability of capital and work force, therefore the demand of anything can't be fulfilled.

Secondly, low income invokes less demand and usage of cheap products, again, less productivity so, the economy falls.

Again, no money circulation would lead to freezing of the capital flow ensuring no development in income. The income is equated with earning, so, no work, no income, no demand, no supply, no production, and lastly, lowest form of economy.