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Gross Domestic Product is not as high as potential output because of demand failure, due to pessimistic business expectations, which discourages private fixed investment spending. Low government spending or high taxes, under consumption, or low exports net of imports may also have this result. In this case, the number of unemployed workers exceeds the number of jobs available, so that if even all-open jobs were filled, some workers would remain unemployed. This kind of unemployment coincides with unused industrial capacity. Economists see it as possibly being solved by government deficit spending or by expansionary monetary policy, which aims to increase non-governmental spending by lowering interest rates...
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