(Answered) how does the high unemployment rate affect economic growth ratehow does the high unemployment rate…

➤ How does high unemployment affect consumption, investment, and fiscal balances?
Higher unemployment reduces household income and consumer confidence, cutting consumption and demand. Firms delay investment and hiring, weakening capital accumulation. Tax revenues fall while benefit spending rises, widening fiscal deficits. These combined effects depress short-run aggregate demand and can limit long-run growth unless countercyclical fiscal or monetary policies support recovery.