16. Inflation, deflation, employment and unemployment.

Question 1

Demand pull inflation

Answer 1

Where increases in AD cause wan increase in the average level of prices

Question 2

Cost push inflation

Answer 2

Where increased costs of production cause firms to raise their prices leading to an increase in the average level of prices within an economy.

Question 3

Tight labour market

Answer 3

Where firms have to increase wages to attract the best labour they require (low unemployment)

Question 4

Cyclical unemployment / Demand deficient

Answer 4

Unemployment that occurs as a result of the economic cycle

Question 5

Demand deficient unemployment

Answer 5

Insufficient AD to employ the available labour

Question 6

Frictional unemployment

Answer 6

people between jobs

Question 7

Structural unemployment

Answer 7

Unemployment resulting from the changing patterns of demand resulting in workers not having the required skills to be in work.

Question 8

Voluntary unemployment

Answer 8

Workers who are not prepared to take a job at current wage rates

Question 9

Discouraged workers

Answer 9

Workers who leave the labour market because despite trying, they are unable to find work