Q23 (d)

Criteria	Marks
Demonstrates a thorough understanding of how TWO policy options could be implemented to reduce the NAIRU of the economy	4
Demonstrates a sound understanding of how TWO policy options could be implemented to reduce the NAIRU of the economy	3
Demonstrates some understanding of the policy options to reduce unemployment	2
Provides some relevant information	1

Sample answer:

The NAIRU is the level of unemployment at which there is no cyclical unemployment. In order to reduce this, policies should aim to target structural or frictional unemployment. By improving occupational or geographical mobility of workers through reforms such as increasing training programmes and relocation assistance, the structurally unemployed can access a wider range of employment opportunities, making it easier for them to secure jobs that are available. Labour market policies that connect potential employees and employers more efficiently will reduce frictional unemployment and the NAIRU.

Answers could include:

• Remove barriers to work for the disabled
• Supply side reforms
• Education and training programs
• Improve labour mobility
• Improve efficiency of job placement agencies.