Question

Demand-side economic policies most effectively reduce

Answer 1

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Demand-side economic policies most effectively reduce aggregated demand.

Answer 2

Answer: unemployment during economic depression

Explanation:

Demand-side policies stimulate the economy by increasing the demand for goods and services, thus incentivising firms to produce more, which will result in firms hiring more workers. Expansive fiscal and monetary policies are the tools that governments can use. This kind of policies is considered by their different advocates (Keynesian economists would implement fiscal policies whilst monetarists would implement monetary policies) to be most effective at reducing cyclical unemployment during economic depression.