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Which should Greece focus more attention on: reducing government debtor reducing the unemployment rate? Discuss.

Which should Greece focus more attention on: reducing government debtor reducing the unemployment rate? Discuss.

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Answer #1

I think Greece should focus more on reducing unemployment.

When the government focuses on reducing unemployment, it would increase spending which will boost the economy and increase output. Increased employment will help increasing purchasing power of people. So, the economy will achieve a positive growth rate. When the economy starts growing, the tax revenue will increase, which would help in reducing the debt.

On the other hand, if the government focuses on reducing debt, it will have to cut spending, which will push the economy further towards recession.

Therefore, Greece should focus more on reducing unemployment.

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