AS Economics: Inflation & Unemployment

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  • Created on: 20-03-13 23:00
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Frictional Unemployment
Unemployment due to movement between jobs in a dynamic economy. Normally regarded
as relatively short term and less problematic than other types.
Structural Unemployment
Caused by structural change in the economy such as the decline of an industry or
technological change. Can be long term.
Regional Unemployment
Occurs in a particular geographic area, after resulting from structural unemployment in
localised industries.
Seasonal Unemployment
This reflects the uneven pattern of activity throughout the year in some industries e.g.
Cyclical or demand deficiency Unemployment
occurs because of falls in aggregate demand during the downturn of the trade cycle and
subsequent recession.
(the ease with which people can move from job to job)
Occupational mobility of labour: the ease of which members of the labour force can
move from one type of work to another. Can be improved by effective retraining.
Geographical mobility of labour: the ease of which members of the labour force can
move from working in one location to another.
Theory X managers might use the fear created from unemployment to force through
cost saving changes in working practices.
Employees choose to stay where they are creating low rates of labour turnover and
saving the firm money on recruitment, selection and training.
Recruitment should become a lot easier ­ there are plenty of applicants!
Creates insecurity which could sap morale within the business.
Can affect consumer spending, which in turn can affect a firm/s revenue and profit.

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Inflation is a sustained increase in the average price level of a country. It can also be
seen as a fall in the value of money. This is known as Deflation.
Demand Pull Inflation-when there is too much demand for a lot less goods, so
firms can raise their prices.…read more



This is a 2 page summary of the causes, consequences and measures of unemployment. More detailed study will be required on the measures of unemployment but a good start point.

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