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The government announced plans to decentralise/re-locate many government departments and state agencies throughout the country - Leaving Cert Economics - Question 8 - 2006
Question 8
The government announced plans to decentralise/re-locate many government departments and state agencies throughout the country. Discuss TWO possible economic advanta... show full transcript
Worked Solution & Example Answer:The government announced plans to decentralise/re-locate many government departments and state agencies throughout the country - Leaving Cert Economics - Question 8 - 2006
Step 1
Explain the underlined term.
Answer
Full employment refers to a situation in an economy where all individuals who are willing and able to work at the prevailing wage rates are employed. It does not imply a zero unemployment rate, as there will always be some level of frictional unemployment, where individuals are temporarily unemployed while transitioning between jobs. Full employment is a key objective of economic policy, as it indicates optimal use of labor resources.
Step 2
Discuss TWO economic benefits and TWO economic difficulties of a full employment economy in Ireland today.
Answer
Benefits:
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Increased consumer spending: When more individuals are employed, disposable income rises, leading to greater consumer spending. This drives economic growth as businesses see increased sales and profits.
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Enhanced productivity: With low unemployment, firms might invest in training and development to improve their workforce's skills, leading to higher productivity levels across the economy.
Difficulties:
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Inflationary pressure: A full employment economy can create upward pressure on wages as workers are in high demand. This can lead to inflation if companies pass on increased labor costs to consumers.
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Skills mismatch: Full employment may lead to a situation where the available job vacancies require skills that the unemployed workforce does not possess, resulting in labor shortages in certain sectors.
Step 3
Outline TWO possible social costs and TWO possible social benefits of these developments.
Answer
Social Costs:
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Displacement of communities: High expenditure on transport infrastructure can lead to the displacement of communities, where people may lose their homes due to construction projects. This can create social upheaval and loss of community identity.
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Environmental impact: Developing transport may lead to negative environmental consequences such as increased carbon emissions and habitat destruction, which can adversely affect local ecosystems.
Social Benefits:
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Improved accessibility: Enhanced transport and communication networks can lead to better access to jobs and services for individuals, facilitating economic participation and reducing social exclusion.
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Job creation: Investments in infrastructure can generate employment opportunities during the construction phase and create long-term jobs in various sectors related to the developed infrastructure.