ECON545 Week-6 Discussion 1

Taxation is one of the primary fiscal policy tools the government has at its disposal to reduce unemployment. When unemployment is high, or the economy needs a boost out of a recession, the government can lower the tax rates on businesses and individuals, ultimately putting more money into the hands of consumers. In general, as consumers spend or demand more goods and services, businesses make more money and need to hire more people to keep up with increased demand. This in turn can result in more people paying taxes into the government and generating revenue.”

Study.com. (2015). Fiscal Policy and the Effects on Unemployment - Video & Lesson Transcript | Study.com. Retrieved April 6, 2015, from http://study.com/academy/lesson/fiscal-policy-and-the-effects-on-unemployment.html
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