economics question?

Question

Hey Guys, please help for the following question:

How does high unemployment affect services like TV broadcasting, street cleaning and elderly care?

Answer 1

High unemployment has nothing to do with the money multiplier in the sense that the previous poster put. The government does not get tax revenue when people draw out their savings. The money supply would not be affected at all, as the savings drawn out by individuals to live on would find their way back to banks as deposits when they are spent.

What high unemployment would do is lower the tax base, as the tax base is dependent upon incomes, and total incomes would be down with higher unemployment. With lower tax revenues, there is lower spending on public goods such as tv broadcasting, street cleaning, and elderly care.

Hope that helps.

Answer 2

Are you a student of economics? I'll assume you are based on your question.

The first thing is the money multiplier, 1 over 1-B, ring a bell. when unemployed people stop saving and draw on it. The result is greater availability of money for the government to tax. These taxes are spent on services(street cleaning). There is less money within a family structure and with adults at home, child care and elder care fall back on the family unit(Sociology). TV broadcasting adjusts to attract advertisers based upon a new demographic of workers now at home and the change in purchasing of durable goods (gross nation product GNP, interest rates and reserve ratios set by the Federal Reserve Bank) .

I hope that helped and didn't confuse you!!!!!