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    The question is "Explain one reason why a significant fall in unemployment might not be a good indicator in the future performance in an economy", I cannot seem to find anything on the web which relates to this question, help anyone?
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    (Original post by Agent456)
    The question is "Explain one reason why a significant fall in unemployment might not be a good indicator in the future performance in an economy", I cannot seem to find anything on the web which relates to this question, help anyone?
    Its obvious. Think about the circular flow of income and how more households will have more money from firms to spend or save because more people have jobs
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    (Original post by Reece.W.J)
    Its obvious. Think about the circular flow of income and how more households will have more money from firms to spend or save because more people have jobs
    I still don't know, sorry I'm new to economics...
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    (Original post by Agent456)
    I still don't know, sorry I'm new to economics...
    Idk if you’re doing a level or if it’s gcse because ik some schools do that but I only started year 12 economics a few weeks ago as well. I’ve already covered this topic so if you have any more questions I’ll happily try and answer
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    (Original post by Reece.W.J)
    Idk if you’re doing a level or if it’s gcse because ik some schools do that but I only started year 12 economics a few weeks ago as well. I’ve already covered this topic so if you have any more questions I’ll happily try and answer
    I'm doing A-level, I'm still stuck with this question
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    (Original post by Agent456)
    I'm doing A-level, I'm still stuck with this question
    Ok so the fall in unemployment means more jobs. More households getting money. However I would say the answer is that you don’t know what people will do with the money. Spend, invest, save all depending on interest rates and what they’re likely to do. They could inject or withdraw by spending in the uk or sending to another country for example
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    (Original post by Reece.W.J)
    Ok so the fall in unemployment means more jobs. More households getting money. However I would say the answer is that you don’t know what people will do with the money. Spend, invest, save all depending on interest rates and what they’re likely to do. They could inject or withdraw by spending in the uk or sending to another country for example
    Thanks and another question I am struggling on is "Explain why a rise in Real GDP per capita may not result in a rise in living standards for everyone."
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    (Original post by Agent456)
    Thanks and another question I am struggling on is "Explain why a rise in Real GDP per capita may not result in a rise in living standards for everyone."
    Because per cap GDP is an average- its not an overall representation. There'll be people included in that average which have really high and really low GDP per cap figures- so for those with lower, they're essentially no better off with living standards.
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    (Original post by Agent456)
    Thanks and another question I am struggling on is "Explain why a rise in Real GDP per capita may not result in a rise in living standards for everyone."
    Real GDP per Capita still provides no indication of whether GDP is distributed fairly equally amongst the population. As hxfsxh says, outliers have a disproportionate effect that twists these figures into something which doesn't really reflect the living standards of the average person. For example, middle eastern countries often have a very high GDP per Capita figure which doesn't capture the living conditions of the migrants who form the backbone of much work there.
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    You could say that even though unemployment fell you don't know what it was in response to it could have been due to recovery
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    the fall in unemployment may not be productive in any way. It may be through manipulation of data, such policy as the Nazis during the 1930s.
    For example, by removing women from the workforce, there are now more jobs. All the unemployed men now find it easy to get those jobs, resulting in a significant fall in unemployment. However, in the long-run, many of those jobs were more efficient being done by some of the women.
    Therefore, a significant fall in unemployment may lead to a shift leftwards of the aggregate supply curve and merely be indicative of a lot of spare capacity in an economy.

    Unemployment means wages stay down as there's more competition to get those jobs. As there's no incentive to work particularly hard as you are harder to replace, you may get lazy and therefore efficiency falls and there is net welfare loss.

    If the unemployment is achieved by lowering a minimum wage set, then companies may hire workers instead of investing into new capital that, in the long run, would increase efficiency. While it may result in a more statically efficient economy, there is a risk of damaging it dynamically.

    There's a few ideas, work on them. Remember to include at least a positive a negative, and a conclusion.
 
 
 
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