Suggestions to Solve Unemployment Problem
Q. What are the three types of unemployment provide the definitions for each?
There are three main types of unemployment: cyclical, frictional and structural. Frictional unemployment occurs because of the normal turnover in the labor market and the time it takes for workers to find new jobs. Structural unemployment occurs because of an absence of demand for a certain type of worker.
Table of Contents
Q. What are unemployment problems?
During a long period of unemployment, workers can lose their skills, causing a loss of human capital. High unemployment can also cause social problems such as crime. If people have less disposable income than before, it is very likely that crime levels within the economy will increase.
- Following are the suggestions to solve unemployment problem:
- (i) Change in industrial technique:
- (ii) Policy regarding seasonal unemployment:
- (iii) Change in education system:
- (iv) Expansion of Employment exchanges:
- (v) More assistance to self employed people:
- (vi) Full and more productive employment:
Q. How do you solve structural unemployment?
Policies to reduce structural unemployment include retraining and geographical subsidies. Fiscal or monetary policy to boost AD will be ineffective in solving structural unemployment.
Q. What are the effects of an increase in money supply?
Effect of Money Supply on the Economy An increase in the supply of money typically lowers interest rates, which in turn, generates more investment and puts more money in the hands of consumers, thereby stimulating spending. Businesses respond by ordering more raw materials and increasing production.
Q. What will cause consumption to fall?
Propensity to save. The opposite of consumption is saving. If consumers become more pessimistic and increase savings, then consumption will tend to fall.