In a mixed market economy, what…

Business Studies Questions

In a mixed market economy, what are typical ways the government can reduce unemployment? For example, can the government pay for projects to create jobs, control new factories to provide employment, create new farm fields to hire workers, or raise taxes to encourage job creation?

Answer

In a mixed market economy, the government employs various strategies to curb unemployment. Among the listed options, the most prevalent method is the government’s investment in projects that generate jobs. This approach embodies a demand-side solution, as it involves funding public initiatives like infrastructure development, which boosts job availability by necessitating additional labor. Such projects can enhance economic activity and provide employment for those without jobs. Conversely, options like controlling factories or establishing new agricultural fields are less common in a mixed market economy due to their implications of greater government regulation and intervention, which are usually less favored in these systems.

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