Matching Skills to Vacancies via Retraining

Steps:

• Identify supply-side policies that enhance labor market efficiency by reducing immobilities.
• Focus on occupational immobility, where skill gaps prevent workers from filling vacancies.
• Evaluate options for direct impact on skill-job alignment.
• Select the measure that targets worker skills specifically.

Why A is correct:

• Retraining upgrades workers' skills to fit available jobs, directly reducing occupational immobility as defined in supply-side economics.

Why the others are wrong:

• B: Reduces income taxes to boost work incentives but does not address skill mismatches.
• C: Modernizes capital equipment for productivity gains, ignoring labor skills.
• D: Privatization improves firm efficiency through market incentives, not skill alignment.

Final answer: A