What happens to the amount of money the government collects in taxes if unemployment is high? It is harder to collect. It stays the same. It goes down. It goes up.

Question

History

Ryan Levy

2 July, 19:51

What happens to the amount of money the government collects in taxes if unemployment is high? It is harder to collect. It stays the same. It goes down. It goes up.

+4

Answers (2)

Know the Answer?

Gilberto · Answer 1

Answer: it goes down

Collins · Answer 2

If unemployment is high, the amount of money the government collects in taxes goes down.

Explanation:

Government is financed mainly through taxes that it collects both from citizens and businesses. When there is full employment or a low percentage of unemployment, there is higher income (with which higher tax burdens) and higher consumption (that is, higher taxes paid by companies). On the contrary, when there are high unemployment rates both the income of the citizenship and the sales of the companies decrease, so that the government collects less money.