6. Economic Performance - Unemployment, Policies to reduce it

Question 1

What policy should be used to reduce cyclical unemployment?

Answer 1

Expansionary monetary policy or expansionary fiscal policy should be used to boost aggregate demand and reduce cyclical unemployment.

Question 2

What are the potential problems with using expansionary monetary policy or expansionary fiscal policy to reduce cyclical unemployment?

Answer 2

There is a conflict with you objective of reducing inflation and the effectiveness of these policies depends on where you are on your short run aggregate supply and The level of the change.

Question 3

What policies should the government use to reduce structural occupational unemployment?

Answer 3

Government should you supply-side policies like;Investment in working schemesRemoval of employment regulations making easier to hire and fire workers

Question 4

What policy should the government and used to reduce structural geographical unemployment?

Answer 4

Providing grants to people to allow them to move to different areas of the countryProviding low-cost housing to people to move to different geographical locations

Question 5

What are the potential problems with the supply-side policy is used to reduce structural unemployment?

Answer 5

Supply-side policies have a high initial investment costThere is a time gap between the implementation of the policy and effects of itThe policies may be better as part of a combined scheme rather than on their own

Question 6

What policies should the government use to reduce frictional unemployment?

Answer 6

A reduction in unemployment benefits to incentivise workingImproving job information

Question 7

What are the potential problems with the policy is used by the government to reduce frictional unemployment?

Answer 7

There is no guarantee these policies will work There is a nice time like between the implementation of the policy and the effects it will haveIs pussies have a large opportunity cost