Economics question!
Economics discussion, revision, exam and homework help.
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Economics question!What types of unemployment would be helped by a fall in the exchange rate?
I was thinking structural as export markets could increase and as we've lost a lot of trade due to the BRICs, etc.
If I'm talking rubbish please tell me!!
Thank you!
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Re: Economics question!To be honest, I would talk about cyclical unemployment. This is mainly as a fall in the exchange rate should increase demand for our products and hence increased price competitiveness. Thus in the short-term firms will have a shortage of labour and employ individuals to fill positions. Though in the long-term if the exchange rises and domestic supply > demand then firms will cost-save through reducing employees and other means.(Original post by BlackAlpaca)
What types of unemployment would be helped by a fall in the exchange rate?
I was thinking structural as export markets could increase and as we've lost a lot of trade due to the BRICs, etc.
If I'm talking rubbish please tell me!!
Thank you!
You could also use structural employment with regards to the manufacturing industry or other agrarian industries. Though structural unemployment mainly occurs due to industrialisation and even a fail in the exchange rate may not make product competitive if wages are high.. -
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Re: Economics question!Ah makes sense!! I need to stop making silly mistakes like that.(Original post by iPodTunes)
To be honest, I would talk about cyclical unemployment. This is mainly as a fall in the exchange rate should increase demand for our products and hence increased price competitiveness. Thus in the short-term firms will have a shortage of labour and employ individuals to fill positions. Though in the long-term if the exchange rises and domestic supply > demand then firms will cost-save through reducing employees and other means.
You could also use structural employment with regards to the manufacturing industry or other agrarian industries. Though structural unemployment mainly occurs due to industrialisation and even a fail in the exchange rate may not make product competitive if wages are high..
Thank you!
