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Effects of unemployment and methods to control (EFFECT ON INDIVIDUALS AND…
Effects of unemployment and methods to control
EFFECT ON INDIVIDUALS AND SOCIETY
Loss of job skills
due to lack of application
expensive to retrain and educate them
Social & political problems
unemployed people join radical groups
engage in troublesome social & political activities
the crime rate would be high if unemployment is HIGH
Loss of income & self-respect
unemployed people may have financial problems
loss self-respect & respect from friends & family
causes depression
MEASURES
Expansionary Fiscal policy
Decrease tax
reduction in excise duty, sales tax will increase people's expenses
reduction in business tax will promote an increase in investment
Will reduce the burden of taxation on community
Increase government expenditure
directly affects aggregate demand
increase in civil servants wage will create more development projects
EFFECT ON ECONOMY
GNP gap
difference between potential GNP and actual GNP
Potential GNP
: level of output with full employment
Actual GNP
:current level of output
the HIGHER the unemployment rate, the GREATER the GNP gap
Cost of unemployment is measured
goods and services which society did not produced
