As the Unemployment Rate Increases

question 65

Multiple Choice

As the unemployment rate increases,

• A) potential GDP increases.
• B) real GDP decreases.
• C) full employment GDP decreases.
• D) both real GDP and potential GDP decrease.
• E) potential GDP decreases.

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Definitions:

Withholding Allowance

A determination made by employees on their W-4 form that influences the amount of federal income tax withheld from their paycheck.

Federal Income Tax

A yearly fee assessed by the national government on the income of individuals, corporations, trusts, and assorted legal entities.

Gross Earnings

The total income earned by an individual or business before any deductions like taxes or benefits.

FUTA

Federal Unemployment Tax Act; a United States federal law that imposes a payroll tax on businesses to fund state workforce agencies.