Future Business Leader Achievments (FBLA) Economics Practice Exam

What is a potential outcome when economic conditions lead to high unemployment?

1. Increased disposable income

2. Higher government tax revenues

3. Greater dependency on social welfare programs

4. More job openings in the market

The correct answer is: Greater dependency on social welfare programs

When economic conditions result in high unemployment, one significant outcome is a greater dependency on social welfare programs. High unemployment typically means that a substantial portion of the population is without work and, in many cases, without sufficient income to meet their basic needs. As a result, individuals and families may rely more heavily on social welfare programs such as unemployment benefits, food assistance, and housing subsidies to support themselves during this difficult time. This increase in dependency can place additional strain on government resources as more individuals seek assistance, potentially leading to higher government expenditures on social welfare programs. The cycle can also exacerbate economic challenges, as decreased consumer spending occurs when many people are without a reliable income. In contrast, increased disposable income, higher government tax revenues, and more job openings are typically associated with healthy economic conditions where unemployment is low, not high. Thus, the option about greater dependency on social welfare accurately reflects the ramifications of high unemployment in an economy.