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A level and O level ECONOMICS 

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Possible Causes of Low Unemployment

Explain the possible causes of low unemployment.



Frequently asked question



Apply economic reasoning and logical analysis to support your arguments.

Possible causes of low unemployment can be attributed to several factors:
➡️1. High levels of economic growth/Gross Domestic Product (GDP): When an economy experiences robust economic growth, it typically generates more jobs to meet the increased demand for goods and services. Increased economic activity translates into higher output, which in turn requires a larger workforce to meet production demands.
➡️2. High levels of education and training: A well-educated and skilled workforce is essential for a productive economy. Countries with high levels of education and training programs can have lower unemployment rates as individuals possess the necessary skills and qualifications needed for available jobs. A highly skilled workforce is more attractive to employers and can contribute to increased employment opportunities.
➡️3. High levels of investment: Increased investment in businesses and infrastructure can stimulate economic activity and create job opportunities. When businesses expand their operations or new enterprises are established, it generates a demand for labor, leading to lower unemployment rates.
➡️4. High levels of consumer spending: Consumer spending drives economic activity, as it creates demand for goods and services. When consumer spending is high, businesses are encouraged to increase production to meet the demand, resulting in a need for additional workers.
➡️5. High levels of exports: Countries with a strong export sector often experience lower unemployment rates. Export-driven industries, such as manufacturing and services, can create employment opportunities as they expand to meet international demand.
➡️6. High government spending/low taxes: Governments can stimulate employment through policies aimed at increasing government spending or reducing taxes. Increased government spending on infrastructure projects or public services can create jobs directly, while lower taxes can encourage consumer spending and business investment, leading to job creation.
➡️7. Low interest rates: Low interest rates can stimulate borrowing and investment, encouraging businesses to expand their operations and create employment opportunities. It also reduces the cost of borrowing for consumers, making it more affordable to finance purchases, thereby increasing economic activity.
It is important to note that the causes of low unemployment are multifaceted and interconnected. A combination of these factors working together can contribute to a lower unemployment rate within an economy.


I. 🍃Introduction
- Explanation of the relationship between economic growth and workforce demand

II. High levels of economic growth/GDP
- Definition and explanation of economic growth
- Importance of economic growth for a country's development

III. More workers required
- Explanation of how economic growth leads to increased demand for workers
- Examples of industries that require more workers during times of economic growth

IV. High levels of education and training
- Importance of education and training for acquiring skills needed for jobs
- Role of government and private sector in providing education and training opportunities

V. High levels of investment
- Explanation of how investment leads to job creation and economic growth
- Examples of types of investment that lead to job creation

VI. High demand for workers
- Explanation of how high demand for workers leads to increased wages and benefits
- Importance of job security for workers

VII. High levels of consumer spending
- Explanation of how consumer spending drives economic growth
- Importance of consumer confidence in driving spending

VIII. More production/more labour
- Explanation of how increased production leads to increased demand for labour
- Importance of productivity for economic growth

IX. High levels of exports
- Explanation of how exports contribute to economic growth
- Importance of international trade for economic development

X. High government spending/low taxes
- Explanation of how government spending and tax policies can stimulate economic growth
- Examples of government policies that have led to economic growth

XI. Low interest rates
- Explanation of how low interest rates encourage more consumption and investment
- Importance of monetary policy in driving economic growth

XII. 👉Conclusion
- Recap of the relationship between economic growth and workforce demand
- Importance of policies that promote economic growth and job creation.


high levels of economic growth/GDP - output requires more workers - high levels of education and training - acquire skills needed for jobs - high levels of investment - high demand for workers - high levels of consumer spending - more production / more labour - high levels of exports - increasing demand for labour high government spending / low taxes - to stimulate economic growth - low interest rates - encouraging more consumption / investment -




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