Question 2 (30 points) (a) In the one-sided search model, to increase the sustainability of its unemployment scheme the government considers the following changes: (1) Increase the duration of employment required before collecting Ul benefits. (2) Finance Ul by taxes on employed workers. Determine the effects of the proposed changes in government policy on the reservation wage and the long run unemployment rate in the one-sided search model of unemployment. Use diagrams and explain your results. (15 marks) (b) In an effort to reduce the unemployment rate the government considers the following policies: (1) Give a subsidy, s, to any firm that hires a worker. (2) Give a payment, q to individuals who choose not to participate in the labour force. Which policy is more effective in achieving the government's goal? Explain using the two-sided search model with the aid of diagrams. (15 marks)