An increase in unemployment,ceteris paribus,may
A)Lead to decreased government expenditures.
B)Lead to increased government revenues.
C)Reduce a budget surplus.
D)Reduce a budget deficit.

Question

Quizplus · Accepted Answer

An increase in unemployment, ceteris paribus, may reduce a budget surplus because higher unemployment typically leads to increased government spending on unemployment benefits and other social services, while also reducing tax revenues as fewer people are earning wages.

An Increase in Unemployment,ceteris Paribus,may