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Which of the following taxes has the greatest effect on the natural rate of unemployment? income...

Which of the following taxes has the greatest effect on the natural rate of unemployment?

income taxes

retail sales taxes

Social Security taxes

real estate taxes

inheritance taxes

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Answer #1

Option 1

Natural rate of unemployment is rate of unemployment which includes only frictional and structural unemployment. Frictional unemployment is when people look for new jobs and structural unemployment is when technological changes takes place which results in industrial reorganization.

Income tax is the one which makes to people to work or to claim unemployment benefits, hence income tax has the direct relation with natural rate of unemployment.

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