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Chapter 7: Q.1 For critical thinking (page 158)

Why might the U.S. government, which funds Social Security, Medicare, and unemployment insurance programs by taxing wages, desire to find a way to reduce self-employment and inhibit the growth of the gig economy?

Short Answer

Expert verified

The gig economy affects independently employed individuals who take part in tax avoidance.

Step by step solution

01

introduction 

Many individuals in the US these days are engaged with the "gig economy" and they offer types of assistance through a web-based stage. One can arrange anything utilizing the internet based stage and business through the web-based stage is developing step by step.

02

explanation

In any case, the issue with the internet based business stage is that individuals included don't believe themselves to be entrepreneurs (independently employed) and they for the most part under-report their pay and wind up settling fewer duties or no assessment by any stretch of the imagination. Along these lines, this is the principal justification for why the US government is figuring out how to diminish independent work.

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Most popular questions from this chapter

A nation's frictional unemployment rate is 1 per cent. Its cyclical rate of unemployment is 3 per cent, and its structural unemployment rate is 4 per cent. What is this nation's overall rate of unemployment?

In what way are the PPI and CPI likely to diverge for a while following a sustained increase in import prices? Explain briefly.

Consider the diagram below. The line represents the economy's growth trend, and the curve represents the economy's actual course of business fluctuations. For each part below, provide the letter label from the portion of the curve that corresponds to the associated term.

a. Contraction

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Suppose that a nation has a labour force of 100 people. In January, Amy, Barbara, Carine, and Denise are unemployed. In February, those four find jobs, but Evan, Francesco, George, and Horatio become unemployed. Suppose further that every month, the previous four who were unemployed find jobs and four different people become unemployed. Throughout the year, however, three people-Ito, Jack, and Kelleycontinually remain unemployed because firms facing government regulations view them as too costly to employ.

a. What is this nation's frictional unemployment rate?

b. What is its structural unemployment rate?

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