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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 November 2007: 150,000 May 2008: 200,000 November 2... 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
To create a bar chart for the unemployment rates from November 2007 to May 2009, label the x-axis with the dates and the y-axis with the number of persons on the Live Register (in thousands). Each bar should represent the total persons for the respective dates:
- November 2007: 150,000
- May 2008: 200,000
- November 2008: 250,000
- May 2009: 400,000
This visual representation highlights the increasing trend in unemployment over the specified period.
Step 2
Outline two effects of increasing unemployment on the Government’s income and expenditure.
Answer
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Increased Government Spending: As unemployment rises, there is a greater demand for unemployment benefits and social welfare assistance. This leads to increased expenditure from the government to support unemployed individuals and families.
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Reduced Tax Revenue: With more people unemployed, there are fewer individuals earning wages and contributing to income tax. This decrease in tax revenue can adversely affect the government’s ability to fund public services.
Step 3
Outline two effects of increasing unemployment on business.
Answer
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Decreased Consumer Spending: Higher unemployment typically leads to reduced disposable income among consumers. Businesses may experience a drop in sales and profits as consumers cut back on spending.
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Increased Difficulty in Recruitment: Unemployment may encourage more people to seek job opportunities; however, businesses may find it challenging to hire suitable candidates due to skills mismatches or overqualified applicants. This can prolong the recruitment process and increase associated costs.
Step 4
State two effects of this situation for the Irish economy.
Answer
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Reduced Economic Growth: The influx of consumers from Ireland shopping in Northern Ireland may lead to decreased sales for local Irish businesses, negatively impacting economic growth and job retention in the region.
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Loss of Tax Revenue: As consumers prefer to shop across the border, the Irish government may experience a decline in VAT revenue and other taxes, affecting public service funding.
Step 5
How can this measure help to reverse the above situation?
Answer
The reduction of VAT rates can incentivize consumers to shop within Ireland rather than overseas. Lower prices may attract consumers back to local shops, consequently increasing sales and recovering tax revenues. This shift in consumer behavior can help stimulate the Irish economy and support local businesses.