Question

1.Explain why it would generally not be considered wise economic policy for a government to attempt to achieve a balanced budget every year.

2.

Consider the individual described below. Which type of unemployment would you suggest that they most likely belong to? Explain.

A woman working as a casual University lecturer for the past 7 years has recently lost her job due to the downturn in international student numbers due to COVID-19. Reduced student numbers are a problem at all local institutions due to these circumstances. She knows that there are jobs available in her field at regional Universities that have been less impacted, but she does not want to move far away from Adelaide due to her need to care for her ill sister.

Answer 1

Wise economic policy: budget or fiscal policy should be according to situation if economy at that time if economy is under recession or slowdown or poverty or unemployment or pandemic like covid19 vis more prevail than government try to increasing its capital as well as current expenditures to increase money supply in the economy to increase demand , create employment or reducing poverty etc thus government may be of deficit budget and expansion fiscal policy are used. Otherwise economy performance bis well in each dimension and inflation is at higher level due to increase money supply than government vtry to increase taxation and increase in taxation andand income than revenue may be more and thus may be surplus budget.

This is type of cyclical unemployment, which is created when their is hange in business cycle, if their is recession than their may be some job loss due to decrease demand of employees and economy is not performing well . During covid 19 lockdown and social distance measure hampered each and every sector ,subsector of economy and their is recession.