Question

why do output and employment sometimes falls and how can unemployment be reduced ?

Answer 1

    Suppose there is a increase in price of the product, or a company incurs losses , or globally all the prices rises, than the output of the product will definitely decrease as its demand decreases, now suppose the cost of input rises then also the price of output will rise and hence its demand decrease then to curb down the cost the company will cut down the employment leading to unemployment.

    Unemployment can be reduced in many ways, by increasing economic growth, by reducing interest rates and thus increasing investment and ultimately increasing employment. Also if the demand of product increases somehow then also more people will get employed, better transportation facility ,better incentives in work area can also boost employment.