Joseph Thomson 13.3 Economics 25 Marker
Using the data in the extracts and your knowledge of economics, evaluate the view that a
further reduction in the UK’s unemployment rate is most likely to be achieved by
improvements in the supply-side rather than the demand-side of the economy. (25
marks)
Intro - define unemployment, how it has already been reduced & define supply-side policies.
Point Supply-side Supply-side Demand-side Demand-side
(MB) (Int.) (Fiscal) (Monetary)
Knowledge Liberalisation of Protectionism Increased Reduced interest
trade - reduced can protect spending could rates may also
taxes and employment, help to reduce increase AD.
reduced jobs in sunset demand-
corporation tax. industries. deficient
unemployment.
Evidence ‘Rising costs of N/A ‘Economic ‘European
welfare.’ growth has economies are
increased the showing signs of
demand.’ growth.’
Application UK’s work Export subsidies In 2009, lots of Eurozone has
scheme, already used in expansionary used quantitative
unsuccessful as the UK, fiscal policies easing.
not all find work. unsustainable. made a deficit.
Analysis Increases Tariff can reduce Increased Cheaper to
incentives to imports and thus demand creates borrow,
work, more jobs increase more jobs as encouraging
created as new demand for people are investment.
firms attracted. domestic goods. spending more
(multiplier).
Diagram Laffer curve. Tariff diagram. AD/AS diagram N/A
showing
expansion.
Evaluation New jobs may Trade wars and Could lead to Depreciation of
not have high game theory, higher taxes in exchange rate,
incomes or be reduce AD and the future and increased deficit.
attractive thus increase austerity (2010), Inverse
enough. Less unemployment. bad for public relationship, and
revenue, and no services. stagflation could
trickle-down. Demand-pull occur.
inflation.
Conclusion - hard to reduce unemployment any further (3.8%), the UK has more of an issue
with supply (productivity puzzle), unemployment is most likely due to insufficient spare capacity.
Using the data in the extracts and your knowledge of economics, evaluate the view that a
further reduction in the UK’s unemployment rate is most likely to be achieved by
improvements in the supply-side rather than the demand-side of the economy. (25
marks)
Intro - define unemployment, how it has already been reduced & define supply-side policies.
Point Supply-side Supply-side Demand-side Demand-side
(MB) (Int.) (Fiscal) (Monetary)
Knowledge Liberalisation of Protectionism Increased Reduced interest
trade - reduced can protect spending could rates may also
taxes and employment, help to reduce increase AD.
reduced jobs in sunset demand-
corporation tax. industries. deficient
unemployment.
Evidence ‘Rising costs of N/A ‘Economic ‘European
welfare.’ growth has economies are
increased the showing signs of
demand.’ growth.’
Application UK’s work Export subsidies In 2009, lots of Eurozone has
scheme, already used in expansionary used quantitative
unsuccessful as the UK, fiscal policies easing.
not all find work. unsustainable. made a deficit.
Analysis Increases Tariff can reduce Increased Cheaper to
incentives to imports and thus demand creates borrow,
work, more jobs increase more jobs as encouraging
created as new demand for people are investment.
firms attracted. domestic goods. spending more
(multiplier).
Diagram Laffer curve. Tariff diagram. AD/AS diagram N/A
showing
expansion.
Evaluation New jobs may Trade wars and Could lead to Depreciation of
not have high game theory, higher taxes in exchange rate,
incomes or be reduce AD and the future and increased deficit.
attractive thus increase austerity (2010), Inverse
enough. Less unemployment. bad for public relationship, and
revenue, and no services. stagflation could
trickle-down. Demand-pull occur.
inflation.
Conclusion - hard to reduce unemployment any further (3.8%), the UK has more of an issue
with supply (productivity puzzle), unemployment is most likely due to insufficient spare capacity.
