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QUESTION AND ANSWER

What is the best policy to reduce unemployment?

In this column, David Horner offers some guidance on answering questions about policies to lessen unemployment

The topic of unemployment is frequently assessed in A-level exams. It is often broken into smaller topics, such as — how unemployment is measured, the problems unemployment creates for individuals, governments and for the economy, and finally, the policy response to the problem of unemployment. Reducing the level of unemployment is a major macroeconomic objective for the UK and most other governments.

Reducing unemployment is made difficult by there being multiple causes of it, making the appropriate policy response to the problem more complex. This is not an unusual situation, as other macroeconomic issues, such as inflation, economic growth and other issues, are often caused by more than one factor.

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Economies of scale

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Population growth and structure

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