Discuss the policies the government can and does uses to lower Unemployment
             Unemployment may be defined as the situation where people who are willing and able to work are unable to find jobs. Unemployment is an undesirable economic situation because it means that aggregate production and income is less than that which the economy is capable of producing. Due to this reason, the government uses a wide variety of resources to contain unemployment rate to its natural rate. The policies that the government uses include fiscal and monetary policies, labour industry reform, training labour and deregulation of wage determination system. Most of these policies are successful in lowering the unemployment levels, but they do have other undesirable effects on the economy which makes some of these policies very unpopular.
             Fiscal policy involves the government using the budget to affect the level of economic growth which has further effects on the level of unemployment. Economic growth is promoted by reducing public sector dissavings and government spending in particular industries. Increased spending in the economy leads to more demand for goods and services. This creates more demand for the factors of production including labour for the firms which leads to more jobs. This creation of new jobs lowers the unemployment rate. This indicates that more people are earning and are being able to satisfy their needs and wants more comfortably which shows a better standard of living for the economy. This can be seen by the increased spending by the government in the agricultural areas in the 2004- 05 Budget. This has allowed the farmers to invest in more capital which permits them to have increased income due to more yields to sell. This has increased their living standards as they have more money in their pockets to spend.
             Fiscal Policy can also have negative effects on the economy. This can be caused as the government can promote spending in sp
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