Which pair of policies is likely to reduce the natural rate of unemployment?
A) job training and employment subsidies
B) high minimum wages and generous unemployment benefits
C) job training and higher minimum wages
D) employment subsidies and policies designed to strengthen labor unions

Question

Quizplus · Accepted Answer

Job training can help workers acquire new skills and qualifications, making them more employable and reducing the natural rate of unemployment. Employment subsidies can encourage firms to hire more workers, further reducing the natural rate of unemployment. In contrast, high minimum wages and generous unemployment benefits can discourage firms from hiring workers, leading to higher unemployment rates. Policies designed to strengthen labor unions may benefit union members but do not necessarily address the underlying factors that contribute to the natural rate of unemployment.

Which Pair of Policies Is Likely to Reduce the Natural