Practicing Success
Which of the following policies can assist a country to reduce unemployment in a short period of time? |
Reducing the growth rate of a country’s population Reducing the inequalities in terms of distribution of wealth and income Increasing the investment in both public and private sector None of the above |
Increasing the investment in both public and private sector |
Increase in investments lead to an increase in GDP of the country, since investment is a component of National Income. With an increase in overall GDP, aggregate demand will increase in short term, leading to excess demand in the economy. To meet excess demand in the economy, more output is needed, thus for that more labour needs to be hired. This whole process results in increase in employment. |