Photo AI
The following table shows Unemployment Rates from November 2007 to May 2009 - Leaving Cert Business - Question 3 - 2010
Question 3
The following table shows Unemployment Rates from November 2007 to May 2009. Total persons on the Live Register | Month | Total Persons | |------------|------... show full transcript
Worked Solution & Example Answer:The following table shows Unemployment Rates from November 2007 to May 2009 - Leaving Cert Business - Question 3 - 2010
Step 1
Draw a bar chart to represent the above information.
Answer
The bar chart depicts the Unemployment Rates from November 2007 to May 2009. The chart shows the rising trend in total persons on the Live Register, with figures climbing from 150,000 in November 2007 to 400,000 by May 2009. Each bar represents the number of individuals registered as unemployed in the respective months.
Step 2
Outline two effects of increasing unemployment on the Government’s income and expenditure.
Answer
-
Increased expenditure on unemployment benefits: As more individuals become unemployed, the government faces higher costs associated with providing unemployment benefits and financial assistance to support those in need.
-
Reduced tax revenue: A rise in unemployment leads to decreased income tax and PAYE receipts, as fewer people are employed and earning taxable income, resulting in lower overall government revenue.
Step 3
Outline two effects of increasing unemployment on business.
Answer
-
Decreased consumer spending: As unemployment rises, disposable income falls, leading to reduced consumer spending on goods and services, which in turn affects business sales and revenue.
-
Lower wage rates: Companies facing declining sales may introduce wage reductions or layoffs to cut costs, further destabilizing the economic environment and limiting workforce purchasing power.
Step 4
State two effects of this situation for the Irish economy.
Answer
-
Decline in domestic spending: As Irish consumers shop in Northern Ireland, local businesses may suffer from reduced sales, impacting overall economic growth and employment in the region.
-
Loss of tax revenue: Increased consumer spending outside of Ireland can result in lower tax income for the government, affecting public services and investments.
Step 5
How can this measure help to reverse the above situation?
Answer
Reducing VAT rates can make goods and services more competitive in price compared to those available in Northern Ireland. This incentivizes consumers to shop locally, thereby increasing domestic consumption, stimulating local businesses, and potentially restoring employment levels and tax revenues.