Low Unemployment | Demand Side and Supply Side Policies | IB Macroeconomics

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In this step you'll learn about demand side and supply-side policies and their role in managing unemployment. Demand side policies involve manipulating interest rates and taxes to stimulate aggregate demand, while supply side policies involve making labor more flexible and skilled. In order to create a successful policy, it is important to understand the type of unemployment the economy is experiencing. Demand side policies may be ineffective in the face of structural unemployment, while supply side policies may be the better option. It is also important to consider the potential long-term effects of any policy, as short-term solutions may lead to long-term problems.