Consumer prices fell at an annual rate of 6.6% in October 2009, according to figures issued by the CSO - Leaving Cert Economics - Question 7 - 2010

The economic term used for the situation described is 'deflation', which refers to a decrease in the general price level of goods and services.

For people in receipt of social welfare, deflation may mean that their benefits have a greater purchasing power since prices are lower. However, it could also lead to a reduction in social welfare payments if the government adjusts these in line with lower living costs, potentially leaving some individuals worse off.

Savers may benefit from deflation because the real value of their savings increases. They can purchase more goods and services in the future with the same amount of money. However, if interest rates are very low, the return on savings may not keep pace with inflationary pressures in the future, potentially diminishing the benefits of saving.

Employees may face job insecurity as businesses may earn lower profits due to falling prices, leading to potential layoffs or wage cuts. Conversely, lower prices could stimulate demand for goods, possibly stabilizing or increasing employment in some sectors.

The underlined term refers to 'savings', which means not spending part of your income or money. It involves setting aside a portion of income for future use or to accumulate wealth.

One reason for the increase in savings is the growing economic uncertainty, which leads consumers to be more cautious and prioritize financial security over expenditure. People may be saving more to prepare for potential future economic challenges.

1. Help create jobs / prevent job losses: Increased consumer spending can lead to greater demand for goods and services, prompting businesses to hire more staff, thereby reducing unemployment in the economy.
2. Investment by entrepreneurs: With increased demand, new business opportunities may arise, encouraging entrepreneurs to invest in new enterprises, which can contribute to economic growth.

The underlined term 'black economy' refers to economic activities that are not recorded and therefore not included in the national income accounts. An example of another such activity is a gardener who operates without declaring income for tax purposes.

1. High price of cigarettes in Ireland / high taxes on cigarettes: High taxes can lead to inflated prices for cigarettes, making smuggling more appealing to consumers seeking lower prices.
2. Inadequate security measures: Weak enforcement at borders may allow smugglers to bring illegal goods into the country without rigorous checks.

1. Opportunity Costs: Tax revenues lost from smuggling cigarettes mean less funding for public services, such as healthcare, education, and social welfare programs, which could hinder economic development.
2. Increased health care costs: The availability of smuggled cigarettes may lead to higher rates of smoking-related health issues, increasing the public health burden and resulting in higher costs for the healthcare system.