If the government wants to reduce unemployment, government purchases should be ________ and/or taxes should be ________.

Question

Quizplus · Accepted Answer

To reduce unemployment, the government needs to increase government purchases as this leads to an increase in demand for goods and services, thereby creating job opportunities. When the government purchases more, firms will hire more people to produce these goods and services. 
Additionally, the government should decrease taxes as lower taxes increase consumers' disposable income, leading to an increase in consumption expenditure, which then creates more jobs.

If the Government Wants to Reduce Unemployment, Government Purchases Should