The government of Concordia adopted expansionary fiscal policies in the last two years with the aim of increasing employment. However, the government has been unable to bring down the unemployment rate in the country. Which of the following, if true, best explains this outcome? A. The per capita income of the people in Concordia has been increasing over the years. B. Most educated people prefer job options in Concordia compared to opportunities available elsewhere. C. During this period, the country's government reduced the limits on foreign direct investment in key sectors. D. The number of students who enroll for higher education is decreasing every year. E. The government implemented a generous welfare plan 3 years ago to support people who cannot find work.

The correct answer is letter "E": The government implemented a generous welfare plan 3 years ago to support people who cannot find work.

Explanation:

According to the excerpt, a government implemented fiscal policies to increase employment for the past two years but the rate has not risen since then. One of the reasons for such a situation could be generous welfare support implemented one year before the fiscal policy measures started.  

If the benefits for the unemployed increase they will be discouraged to return to the labor force. It implies the government should keep the welfare benefits at a level from where unemployed individuals can cover basic needs only but encourage them to find a job to be productive for the economy.

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