Because of sluggish sales in new homes around the nation, 22% of the construction workers in that industry are unemployed.

Question

This raised the national unemployment rate to 7%. a. Problem?

b. Fix?

c. Fiscal Policies?

Answer 1

a. The problem is that new home sales have dropped which has led to the unemployment of new home builders.

b. One fix in this scenario is to divert the new home builders to the construction of other projects that require similar skills. Another fix would be to increase new home sales.

c. One fiscal policy that may be beneficial is a subsidy given to people who buy new homes. This would increase demand for these homes which would lead to the construction of new homes and employ more construction workers.