policies to reduce unemployment

Question 1

policy to reduce cyclical unemployment

Answer 1

-expansionary fiscal/monetary policy

eval: conflict of objectives
-gov finances
-C.A. deficit
-consumer/business confidence
-time lags

Question 2

policy to reduce real wage unemployment

Answer 2

-reduce min wages
-reduce t.u. strength

eval:
-impact on workers
-reduce t.u. strength

Question 3

policy to reduce structural unemployment

Answer 3

-interventionist:
-g spending on ed/training
-subsidies for in-work training
-g on infrastructure

market-based:
-reduce benefits
-deregulate hiring/firing

Question 4

policy to reduce frictional and evaluation of supply with unemployment

Answer 4

-interventionist:
-more and better resources for job centres
-subsidies to private job agencies
-infrastructure

market-based:
-reduce benefits

-no guarantee of success
-cost
-time lag
-negative stakeholder impact