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Evaluating Government Policies
Cyclical unemployment
Natural Rate of Unemployment
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Structural unemployment is the most serious one to deal with
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Demand-side policies are ineffective, since it will contradict government objectives, especially stable inflation
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Supply-side policies are more useful for dealing with natural rate of unemployment
Inflation Policies
Demand-pull inflation
Cost-Push inflation
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Cause by an increase in COP or supply shocks
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Demand side policies only cause even greater negative consequence
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