Which of the following government policies would fail to lower the unemployment rate?

• A. Reducing interest rates to stimulate investment
• B. Implementing public works projects
• C. Providing job training programs
• D. Increasing taxes on businesses

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the relationship between government policies and unemployment. Policies that stimulate demand or improve worker skills tend to reduce unemployment, while policies that increase costs for businesses may have the opposite effect.
2. Step 2: Analyze how reducing interest rates affects unemployment. Lower interest rates make borrowing cheaper, encouraging investment and business expansion, which can create jobs and reduce unemployment.
3. Step 3: Consider the impact of public works projects. These projects directly create jobs by employing workers to build infrastructure, thus lowering unemployment.
4. Step 4: Evaluate job training programs. By improving workers' skills, these programs increase employability and help reduce structural unemployment.
5. Step 5: Examine the effect of increasing taxes on businesses. Higher taxes raise the cost of production, potentially discouraging hiring or causing layoffs, which may fail to lower or even increase the unemployment rate.