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What is likely to be impact of efforts towards reducing unemployment on the production potential of the economy? explain.
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What is likely to be impact of efforts towards reducing unemployment o...
Production potential will increase because when employment is increased, income is increased.. when income is increased demand and investment will increase... with increase in investment production capacity will increase
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What is likely to be impact of efforts towards reducing unemployment o...
Impact of Efforts towards Reducing Unemployment on the Production Potential of the Economy

Reducing unemployment is one of the primary goals of any government as it leads to social and economic development. However, the impact of efforts towards reducing unemployment on the production potential of the economy can be both positive and negative.

Increased Labor Supply
One of the positive impacts of reducing unemployment is an increase in the labor supply. As more people enter the workforce, the production potential of the economy increases. This is because the increased labor supply can lead to an increase in production, which in turn leads to an increase in economic output.

Increased Consumer Spending
When people are employed, they have more disposable income, which leads to increased consumer spending. This increased spending can lead to an increase in demand for goods and services, which can lead to an increase in production. This can lead to an increase in the production potential of the economy.

Higher Tax Revenue
When more people are employed, the government collects more tax revenue. This increased revenue can be used to invest in infrastructure, education, and healthcare, which can lead to an increase in the production potential of the economy.

Increased Wage Costs
One of the negative impacts of reducing unemployment is an increase in wage costs. As more people enter the workforce, there is more competition for talent, which can lead to an increase in wages. This can lead to an increase in production costs, which can lead to a decrease in the production potential of the economy.

Inflationary Pressures
When there is an increase in demand for goods and services due to increased consumer spending, it can lead to inflationary pressures. Inflation can lead to an increase in production costs and a decrease in the production potential of the economy.

Conclusion
In conclusion, efforts towards reducing unemployment can have both positive and negative impacts on the production potential of the economy. The impact depends on various factors such as labor supply, consumer spending, tax revenue, wage costs, and inflationary pressures. Therefore, policymakers must take into account these factors while implementing policies to reduce unemployment.
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One of the most critical yet troublesome social policy questions is how many actually suffer because of labor market problems. Our social statistics, in many ways, exaggerate the degree of difficulty. Today unemployment does not have similar effects as compared to it in the 1930s. Then, most of the unemployed were primary earning member of their respective families, when income was usually at the level of subsistence, and when there were no social programs for those not succeeding in the labor market. Increasing affluence, arising out of increase in the families with more than single wage earner, the rising predominance of secondary earners among the unemployed, and new social welfare protection schemes have no doubt mitigated the effect of being without a job.Earnings and income data also exaggerate the extent of suffering. Among many with hourly wage at or below the minimum wage level, the overwhelming majority is from relatively well to do families having multiple-earners. Most of those taken into account by the poverty statistics either have family responsibilities or are elderly or handicapped which keep them out of the labor force, so the poverty statistics are by no means correct indicators of labor market indices.Yet, our social statistics underrate the degree of hardships in the labor-market in many ways. The unemployment counts do not include the millions of fulltime employed workers with wages so low that their families remain in poverty. Low wages and frequent or long time unemployment often cause lack of ability to support oneself. Because the number of people facing unemployment at some time during the year is many times the number unemployed across the year, those who bear the brunt of forced joblessness can equal or surpass average annual unemployment, even though only a small number of the unemployed in any month actually suffer. For every person included in the monthly data, there is one working part-time because of his incapability to find full-time work, or else outside the labor force but looking for an employment. Finally, social welfare schemes in our country have always focused on the elderly, disabled, and dependent, so that the unusual expansion of cash and in-kind transfers does not necessarily mean that those not succeeding are effectively protected.As a result of such contradicting evidence, number of those suffering seriously as a result of labor market problems is uncertain, and, hence, it is debatable if high levels of unemployment can be tolerated or must be countered by job creation and economic stimulus. There is only one unanimous agreement in this deliberation that the extant poverty, employment, and earnings statistics are not adequate for measuring the consequences of labor market problems, their primary applications.Q. Which of the following reflects the main idea of the passage?

One of the most critical yet troublesome social policy questions is how many actually suffer because of labor market problems. Our social statistics, in many ways, exaggerate the degree of difficulty. Today unemployment does not have similar effects as compared to it in the 1930s. Then, most of the unemployed were primary earning member of their respective families, when income was usually at the level of subsistence, and when there were no social programs for those not succeeding in the labor market. Increasing affluence, arising out of increase in the families with more than single wage earner, the rising predominance of secondary earners among the unemployed, and new social welfare protection schemes have no doubt mitigated the effect of being without a job.Earnings and income data also exaggerate the extent of suffering. Among many with hourly wage at or below the minimum wage level, the overwhelming majority is from relatively well to do families having multiple-earners. Most of those taken into account by the poverty statistics either have family responsibilities or are elderly or handicapped which keep them out of the labor force, so the poverty statistics are by no means correct indicators of labor market indices.Yet, our social statistics underrate the degree of hardships in the labor-market in many ways. The unemployment counts do not include the millions of fulltime employed workers with wages so low that their families remain in poverty. Low wages and frequent or long time unemployment often cause lack of ability to support oneself. Because the number of people facing unemployment at some time during the year is many times the number unemployed across the year, those who bear the brunt of forced joblessness can equal or surpass average annual unemployment, even though only a small number of the unemployed in any month actually suffer. For every person included in the monthly data, there is one working part-time because of his incapability to find full-time work, or else outside the labor force but looking for an employment. Finally, social welfare schemes in our country have always focused on the elderly, disabled, and dependent, so that the unusual expansion of cash and in-kind transfers does not necessarily mean that those not succeeding are effectively protected.As a result of such contradicting evidence, number of those suffering seriously as a result of labor market problems is uncertain, and, hence, it is debatable if high levels of unemployment can be tolerated or must be countered by job creation and economic stimulus. There is only one unanimous agreement in this deliberation that the extant poverty, employment, and earnings statistics are not adequate for measuring the consequences of labor market problems, their primary applications.Q. The word extant, as used in the passage, means

What is likely to be impact of efforts towards reducing unemployment on the production potential of the economy? explain.
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What is likely to be impact of efforts towards reducing unemployment on the production potential of the economy? explain. for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about What is likely to be impact of efforts towards reducing unemployment on the production potential of the economy? explain. covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is likely to be impact of efforts towards reducing unemployment on the production potential of the economy? explain..
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