Evaluate Alternative Measures Which Can Be Used to Reduce Unemployment.

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Unemployment refers to the numbers of people not working and can be measured by the claimant count and labour force survey. There are different types of unemployment and each of them requires different policies to overcome them.

 Firstly Cyclical unemployment or demand deficient unemployment is caused by a lack of spending throughout the economy and generally affects all sectors of the economy because spending is falling. To overcome this, the government needs to introduce policies which seek to boost spending throughout the economy. An example would be a loosening of monetary policy and cutting interest rates which make borrowing for individuals and businesses cheaper. They borrow money which is then spent in the economy which…show more content…
Another problem with these policies is geographical immobility. Unemployment might exist in one part of the country and jobs in another. Getting workers to move might be difficult since some workers will not want to move away due to family or inconvenience.

 Frictional unemployment occurs when people leave their job and search the labour market for something better. This is more of a problem when the economy is doing well than in a recession when fewer jobs exist, so workers tend to hold onto jobs if they have one. Frictional unemployment can be reduced by making information readily available for those looking for new jobs, for example in Job centres or on the internet and by making it difficult to claim benefits when unemployed so unemployed people have to get work in order to have a decent standard of living.
 However cutting befits might have a negative impact on those least well off in society and could lead to rising unemployment if those on benefits cut back their spending even more meaning a fall in AD across the economy. This could generate a negative multiplier effect a lead to further rises in unemployment.

 When governments look at policies to reduce unemployment, they tend to look at the short term and then the long term. In the short term, they need to ensure there is sufficient demand and economic growth in the economy to help control cyclical unemployment. This is done by adopting
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