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Government Measures to Tackle Unemployment

Question

Discuss whether government policy measures can reduce unemployment.

Category:

Unemployment

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Preview Answer

I. 🍃Introduction
- Brief overview of the importance of government policies in influencing economic growth and employment
- Thesis statement outlining the factors that may influence the effectiveness of government policies in promoting economic growth and employment

II. Factors that may support the effectiveness of government policies
A. Cutting income tax
- Increase disposable income
- Increase consumer spending
- Raise total demand
- Increase output
- Create job vacancies
- Reduce cyclical unemployment
- Raise reward from working
- Reduce voluntary unemployment

B. Cutting interest rates
- Increase borrowing
- Reduce saving
- Increase consumer spending
- Increase total demand
- Increase output
- Create job vacancies
- Reduce cyclical unemployment

C. Introducing supply-side policy measures
- Education
- Raise productivity
- Increase labour productivity
- Reduce structural unemployment

D. Direct employment by the government

III. Factors that may hinder the effectiveness of government policies
A. Lack of consumer confidence
- Consumers may not spend more even if income tax or interest rates are reduced

B. Lack of firm confidence
- Firms may not expand output or take on more workers

C. Firms may expand output without taking on more workers
- Employing more capital
- Getting existing workers to work overtime

D. Education may be in the wrong areas
- Privatisation may result in firms cutting employment to reduce costs

E. External shocks
- Global recession could offset government policy measures

IV. 👉Conclusion
- Recap of the factors that may influence the effectiveness of government policies in promoting economic growth and employment
- Final thoughts on the importance of considering these factors when designing and implementing government policies.

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