Question

A government has started a public works program. The program uses tax

money to hire workers to repair roads, build dams, and install power lines.
The government has also reduced the taxes businesses pay for each worker
they employ.
Which macroeconomic goal is this government trying to achieve?
O A. Decreasing per capita GDP
O B. Reducing unemployment
O C. Reducing inflation
O D. Increasing GDP

Answer 1

B. Reducing unemployment

Step-by-step explanation:

The government, in this case, is using expansionary fiscal policies to create employment. Hiring people to build dams, repair roads, and install power lines leads to an increase in the government's spending in the economy. Consequently, a higher number of people will be working and earning. Increased earnings cause the aggregate demand to rise.

A reduction in business taxes reduces production costs. Businesses will be able to increase production, expand, and hire more workers when the cost of doing business is low.