When the unemployment rate goes up, the economy is typically affected in the following ways:
a. Fewer people pay income taxes - This is true, as higher unemployment means fewer people have jobs and therefore fewer people are earning income to be taxed.
d. Less money is spent on investments - This is also true since higher unemployment may lead to lower consumer spending and overall economic uncertainty, which can reduce investment in businesses.
The other options (b, c, e) are generally not correct in the context of rising unemployment:
b. Sales tax rates go down - This is not typically a direct consequence of rising unemployment. Sales tax rates are generally set by governments and are not automatically adjusted based on unemployment rates.
c. Many people refinance their houses - While some might refinance to take advantage of lower interest rates, a higher unemployment rate can lead to economic uncertainty, making refinancing less appealing for many.
e. People spend more money on larger items - Generally, higher unemployment means people are more cautious with their spending, especially on larger items, so this statement is not typically true.
So the correct selections are a and d.