Discuss the economic effects of a reduction in unemployment (18)
One of the main government policy objectives is high employment or most of the countries even aim for full employment, which is a term for unemployment at 3%. This is because government acknowledges that employment benefits individuals, government itself and in most cases the whole society, as it can cause a sustainable economic growth and raise people’s material standard of living. However, every single country has some degree of unemployment, as it is impossible to avoid, so government uses different policies to reduce as much unemployment as possible. These policies are demand side policy, which is increasing the AD to reduce unemployment and supply side policy which means increasing the AS using different methods and with it increasing the need of the labour. Using these two policies the unemployment will be reduced and the effect of reducing the unemployment is usually beneficial rather than detrimental, but I will discuss both sides in this essay.
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Peer Reviews
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Quality of writing
The essay has a solid structure, having a clear introduction and conclusion set out. The introduction could be more clinical, however, as it talks about government policies to reduce unemployment whereas that is unnecessary. I would advise jumping straight into the question when writing an introduction, outlining the main benefits and disadvantages. Spelling, punctuation and grammar are fine.
Level of analysis
The analysis in this essay is sound. I liked how there was a discussion of the effects through using diagrams. Diagrammatical analysis is the best way to gain marks, as it shows a variety of skills. Showing a shift and describing why it has occurred, and what the effects are, will gain credit quite easily! This essay has done this well, using a production possibility frontier and aggregate demand and supply diagram to display the effects of reduced unemployment. As mentioned above, I think there needed to be some exploration of more employment causing increased demand, which could cause inflation (shown by an increase in aggregate demand on the diagram). Another perceptive comment would be that increased employment could result in vast increases in the demand for imports, worsening the UK's current account deficit. This would then lead to some evaluative points and a discussion of extent. By exploring the composition of demand, marginal propensity to consume, current account position, etc, would all gain credit and form a strong evaluative judgement.
Response to question
This essay engages well with the question, but the argument is a bit one-sided. In my opinion, there needed to be discussion of decreased unemployment causing increased demand, and possibilities of demand-pull inflation. Saying that, there are other problems with this essay. In my experience, when talking about unemployment it is necessary to talk about the size, cause and length of unemployment. So, if short-term unemployment is decreased, this has lesser effects than a decrease in long-term unemployment. Such perceptive evaluation is necessary to drive this essay to the higher marks!
