Question

What happens to the amount of money the government collects in taxes if unemployment is high?

Answer 1

Explanation:

when the unemployment is high, The Government gave loan to the people to set up their small scale business. The amount of money the government collect in taxes is used to gave loans to the borrower as per their needs.

Answer 2

If the unemployment is high in that case it becomes difficult  for the government to collect that money as taxes

Explanation:

• When the there is unemployment then the workers should be exempted from paying income taxes, since they do not make enough money.
• Due to unemployment the government would not be collecting the same level of taxes from the people as a result it would result in deficit and they will need to borrow money or cut down on their spending of money
• There would be lesser government investments since  government would be collecting lesser revenues in regard to taxes. If the government spending comes down then the GDP levels also decrease

To know more about unemployment

Differentiate between disguised unemployment, seasonal unemployment and educated unemployment?

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