“Unemployment is at its lowest level since 2009, according to the latest figures from the CSO.” (RTE News November 2013) (i) What do the initials CSO stand for? (ii) Discuss one economic effect which a fall in unemployment may have on each of the following: • Retailers in Ireland; • Government finances; • Ireland’s Balance of Trade (i.e - Leaving Cert Economics - Question b - 2014

As unemployment falls, more individuals enter the workforce, leading to increased consumer spending power. This increase in disposable income often results in higher sales for retailers, as consumers are likely to spend more on goods and services. Retailers may experience increased profits, enabling them to expand their operations and hire more staff to meet the growing demand.

A decrease in unemployment typically leads to increased tax revenues for the government. With more people employed, income tax collection rises, and spending taxes such as VAT also increase due to higher consumer spending. Furthermore, the government may see a reduction in welfare expenditure, as fewer individuals rely on social support, allowing funds to be allocated towards other public services.

When unemployment decreases, consumer spending rises, leading to higher imports of goods due to increased demand for foreign products. However, if the reduction in unemployment also stimulates economic growth, it may boost exports as domestic businesses expand and produce more goods for external markets. Thus, while imports may rise, exports can potentially increase at an equal or greater rate, positively impacting the Balance of Trade.