Answer to Question #96798 in Macroeconomics for Emily

Question

Critically comment: Activist fiscal policy of the type promoted by supporters of Employment of Last Resort(ELR) programs is highly destabilizing since it interferes directly with the operation of layout markets. Indeed, by altering wages and employment levels, these policies undermine the efficiency of free markets and generate inflationary pressures. In addition, ELR programs impose a fiscal cost to society since these programs must be financed through higher taxes.

Answer 1

The employer of last resort (ELR) is a proposal for a federally-funded program in which the government employs all of the jobless who are ready, willing, and able to work in a public sector project at a base wage.

So, the statement above is true.