Business

Recently, it was observed that people have started saving more rather than spending. This has impacted the demand for luxury goods and services. The decline in the demand led to unemployment in the related sectors. What can be a primary solution to reduce the unemployment levels in the country?

a. increase the interest rates

b. impose fine for savings

c. force industries to rehire employees

d. reduce the interest rates

e. import goods and services

Ok so I think the answer would be lower interest rates because then people would have more money to spend, which would buy more products that would increase money to hire more people

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  1. I agree with you.

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  2. . What can be a primary solution to reduce the unemployment levels in the country?
    increase the interest rates
    impose fine for savings
    force industries to rehire employees
    reduce the interest rates
    import goods and services
    NextReset

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  3. (D) Reduce interest rates. Let people save their money. Raising interest rates would only increases the difficulty in saving money, forcing people to clutch their savings even tighter. In a system where people are able to store and save their money more efficiently, then the more money they can afford to spend. This may allow people to continue to purchase luxury goods, because they won't have to sacrifice necessities. With this hypothetical rise in demand, there may also be a rise in employment, which would eventually counteract the problem presented in this question.

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