Unemployment Inflation The Balance of Payments and Policies

Question 1

what is unemployment

Answer 1

people who are willing and able to work but are not employed

Question 2

structural unemployment

Answer 2

this occurs when there is a long term decline for demand in an industry

Question 3

demand deficient unemployment/ cyclical unemployment

Answer 3

this occurs when there is lack of demand for a good, this occurs during economical declines

Question 4

what is the claimant count

Answer 4

counts the number of people who are unemployed and claiming unemployment related benefits

Question 5

what is inflation

Answer 5

the rise of the average price level over time

Question 6

what is CPI

Answer 6

this is weighted basket of goods and measures average change of price of the goods in the basket
- food
- transport
- housing
- medical care

Question 7

what is RPI

Answer 7

a measure of inflation which measures the change in price of things such as mortgage and council tax also includes frequently bought goods(CPI)

Question 8

what is demand pull inflation and examples

Answer 8

prices increase due to a rise in demand. low taxes, lower interest rates and low exchange rate(producers have to increase price)

Question 9

what is cost push inflation

Answer 9

this when firms have to increase prices due to cost of production being more expensive. rise of raw materials, increased wages, low interest rates(imports more expensive)

Question 10

monetary policy

Answer 10

the manipulation of interest rates , the money supply to influence the level of economic activity `(central bank)

Question 11

what is quantitative easing

Answer 11

central bank prints money to purchase government bonds
this will encourage spending and borrowing in the economy

Question 12

how to encourage expansionary monetary policy

Answer 12

low interest rates

Question 13

how to encourage contractionary monetary policy

Answer 13

high interest rates

Question 14

what is the current account

Answer 14

includes all the economic transactions between countries

Question 15

the causes of imbalance of payments

Answer 15

strong currency(cheap imports)
economic growth(increase in consumer confidence)
deindustrialisation

Question 16

what is austerity

Answer 16

when tax is increased to decrease a countries deficit

Question 17

what is fiscal policy

Answer 17

the use of government spending, taxation and borrowing to affect AD, output and jobs

Question 18

how can we achieve expansionary/ contractionary fiscal policy

Answer 18

cut taxation
increase tax

Question 19

how can u cut budget deficit

Answer 19

interest should be raised and also taxation

Question 20

how can training improve the output of a workforce

Answer 20

training will make sure that people are equipped with the right skills therefore productivity increases