Reducing Unemplyment

The economy of country X is in a slowdown and we have cyclical unemployment. In the short run demand determines supply. This means that we have excess capacity, i. e. the economy works under capacity. Due to decreased aggregate demand we have decreased demand for labor. In the short run the prices are rigid, so this decreased demand for labor is expressed as a direct unemployment. Our task in the short run is to try to reduce the level of this kind of unemployment.

Our first step is to try to increase aggregate demand. Increasing aggregate demand, we will increase output and the increased output will increase the demand for labor. Aggregate demand consists of Consumption, Investment, Government expenditures and Net exports. The first thing we could do is to increase government expenditures. The increased government expenditures will shift aggregate expenditures schedule up and so increase aggregate demand. So let’s apply this fiscal policy. It is very important where our government is going to spend its money. I intend to advice the government to increase its expenditu

10.insufficient vocational training, not corresponding to changes in technology.

But where I am going to get the money from. I am going to get a loan from a foreign bank, selecting the one with the lowest interest rate and hoping that the returns on the public investment will be greater than the this interest rate.

addressing regional employment disparities.

Some topics in this essay:
Organisation ILO, Investment Government, , labour market, SAPRD ISPA, employment strategy, aggregate demand, economic activity, EES Bulgaria, government expenditures, short run, public investment, demand labor, EU’s European, economic activity rate, unemployment rate, increased government expenditures, increase economic activity, activity rate, development labour market, activity rate population,