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How might governments lower the natural rate of unemployment?
An easy way to organise the answer is to separate possible solutions into two broad groups; interventionist and market (supply-side) solutions. Interventionism should not be limited to easy demand-management but include interventionist supply-side suggestions. Market solutions are firmly centred on monetarist/classical thinking, i.e. supply-side policies.
What is the theory of Second Best? Prove the theorem with the help of a diagram.
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what is the theory of second best? prove the theorem with the help of a diagram.
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