Future Business Leaders of America (FBLA) Accounting Practice Test 2025 - Free FBLA Accounting Exam Questions and Study Guide

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What is the purpose of unemployment taxes?

To fund retirement plans for employees

To provide funds for workers temporarily out of work

Unemployment taxes are designed primarily to provide funds for workers who find themselves temporarily out of work. When employees are laid off or lose their jobs for reasons that are not their fault, the unemployment insurance program helps support them financially while they search for new employment. This safety net is crucial for stabilizing the economy during downturns by helping maintain consumer spending, thereby reducing the likelihood of more significant economic deterioration. The collected unemployment taxes contribute to a pool of funds that states use to pay out unemployment benefits to eligible individuals. This essential function of unemployment taxes underscores their role in workforce stability and social security for those facing job loss.

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To cover health insurance costs for employees

To increase state revenues

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