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Topics: Monetary policy, Unemployment, Keynesian economics Pages: 2 (533 words) Published: April 15, 2013
Unemployment, especially among young people, is a serious problem in many countries today.It’s one of the best headache problem in my country. Unemployment leads to social degeneration. In less developed countries, unemployment becomes increasingly crucial. In Vietnam, our government are trying to solve unemployment which has increased in recent years. The solution for unemployment is, obviously, to create new jobs.That's when the government is expected to step in and provide solutions. Monetary Policy:

The solution used first to address sustained high unemployment is monetary stimulus from the Government. Expansive monetary policy is powerful, quick and usually effective. Lower interest rates allow families to borrow more cheaply to buy what they need, like cars, homes and consumer electronics. This stimulates enough demand to put the economy back on track. Low interest rates also allow businesses to borrow for less, giving them the capital to hire new workers to meet rising demand. Fiscal Policy:

However, when monetary policy doesn't work, then fiscal policy is usually demanded. This means the government must either cut taxes or increase spending to stimulate the economy. . However, it can be more effective once executed. It also provides much-needed confidence that the government will stimulate the economy and things will get better. Confidence is a crucial ingredient in convincing people to spend now for a better future. Cutting taxes has a similar, but even more direct, effect as lower interest rates. It gives consumers more money to spend, increasing demand. It also cuts costs for businesses, which can use the cash to invest in their business and hire more workers. Government spending usually takes the form of jobs programs, where the government hires workers and businesses directly to build things or provide services. Unemployment is very terrible.I don’t want to be a jobless in the future,so I think I must doing now. Firstly,I try to study hard to get...
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