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PPE Mocks Revision - Coggle Diagram
PPE Mocks Revision
Unemployment
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types of unemployment
cyclical unemployment - workers without employment due to a fall in total demand for goods and services
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seasonal unemployment - workers without employment due to a decrease in demand at certain times of year
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benefits of unemployment
easier to recruit - if there are more workers looking for employment, it is easier for firms to find new workers and expand output
dynamic economy - unemployed workers may have to accept a lower wage rate to get a job, which reduces costs for firms, meaning they can lower prices and be more price competitive against overseas firms
costs of unemployment
lower standard of living - individuals have less income so can afford fewer goods and services that contribute to their wellbeing
lower income - unemployment benefit is relatively low and wages are pushed down due to a surplus of workers
Inflation
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Causes of inflation
too much demand - this happens when total demand rises faster than total supply and a cause of this is increased incomes, because consumers are able to afford more goods and services
rise in costs - this is caused by a rise in costs of production, which firms try to pass onto consumers to maintain profits. this leads to a rise in the general price level
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