Unemployment

 

Unemployment is such a bad phenomenon to each of the country because it will affect to the country’s economy. If the UK economy falls, UK would face huge issues. Based on the news, UK unemployment falls to 2.5 million which mean UK employment getting lesser and their country economy getting better and better. Due to the news we can know that they have found some ways to solve this problem. There are two ways to overcome the unemployment; there are fiscal policies and monetary policies. Fiscal policies are helping to increase aggregate demand and the rate of economic growth.  Government need to pursue expansionary fiscal policy to cutting taxes and increasing government spending. After lower the taxes, disposable income will increase. Expansionary monetary policy is when a central bank uses its tools to stimulate the economy. UK central bank which are bank of England use those policy to fix the unemployment issue.

An increasing in aggregate demand, the real GDP will be increasing at the same time. If firms produce more, the demand for workers will increase therefore the demand deficient unemployment will decrease. Moreover, the higher the aggregate demand the stronger the economic growth which means fewer job losses. Government also should create additional demand to reduce unemployment. Monetary policies lower the rates borrowing because want people to make investment and encourage people to spent more. It will increase the aggregate demand and the GDP will increase too so the demand deficient unemployment decrease.

These are the ways to overcome the unemployment. It is important to the country which is facing this problem because it is related to the economics of the country.