If the government wants to reduce unemployment then the Government could a) Increase spending b)…
Increasing government spending can reduce unemployment by raising aggregate demand. Higher demand encourages firms to expand output and employment, whereas spending cuts or…
Choose your answer
If the government wants to reduce unemployment then the Government could
a) Increase spending
b) Decrease spending
c) Taxes should be increased
Answer and explanation
Correct answer A
Increasing government spending can reduce unemployment by raising aggregate demand. Higher demand encourages firms to expand output and employment, whereas spending cuts or higher taxes tend to restrain demand.
Practice for these exams
-
Telangana SET (TG SET)