Answer to Question #137210 in Macroeconomics for December

Question

54. Due to coronavirus pandemic, many education institutions adopted an online teaching method. This meant that all educators must now be able to do teaching online. Mary, a contract educator, was laid off by her employer because she does not know how to use online teaching tools. Until she finds a new job, Mary is…

[1] structurally unemployed.

[2] cyclically unemployed.

[3] seasonally unemployed.

[4] frictionally unemployed.

55. Suppose South Africa is experiencing cyclical unemployment. What will be the appropriate policy to tackle South Africa’s unemployment problem?

a) improve the quality of education and training to increase the number of skilled labour

b) increase in government spending on basic infrastructure development in rural areas

c) reducing interest rate and taxes to stimulate aggregate demand in the economy

[1] a

[2] b

[3] c

[4] b c

[5] a b c

Answer 1

solution

(a) [ 1 ] structurally unemployed

mary is unemployed because she has not the skill of online teaching.so this unemployment is due to the lack of skill. so this is structurally unemployed.

(b) [ 3 ] c

South Africa is experiencing cyclical unemployment .and reason of cyclical unemployment is reduction in aggregate demand .Lower levels of taxation lead to higher levels of disposable income and an increase in consumption.so to reducing interest rate and taxes to stimulate aggregate demand in the economy is the best policy to reduce cyclic unemployment.