How can demand and supply side policies help people like W. Jorgensen?
W. Jorgensen is a businessman who is not very happy due to the decreasing demand of his company’s cars, and is worried about the cost of his labour force. To help someone like him, we can use demand and supply side policies.
For demand side policies, we can do something like “Cash for Clunkers”, where it encourages people to buy eco-friendly cars. By doing something like this, the government will be able to help businessmen such as W. Jorgensen by aiding them with money. The problem that this policy will encounter is that because we know that we cannot increase the government spending (as that will increase debt), we will have to think of a way to reallocate the spending ratios.
On the other hand, if we were to use supply side policies, we should decrease the payment of unemployed workers so that they will not rely so much on the benefits as a unemployed and will be encourage to be employed. Another solution may be to decrease the demand for oil so that the prices will drop.