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Factors Affecting Workers' Mobility


Analyse how an increase in productivity can affect unemployment.



Preview Answer

I. Introduction
- Definition of productivity and unemployment
- Importance of understanding the relationship between the two

II. Positive effects of an increase in productivity on unemployment
- Lower average costs of production
- Increased output and revenue
- Higher profits for firms
- Encouragement for firms to expand and employ more workers

III. International competitiveness and its impact on unemployment
- Increased productivity leading to more exports
- Higher demand for labor, further reducing unemployment

IV. Negative effects of an increase in productivity on unemployment
- Same or more output produced with fewer workers
- Reduction in demand for labor, leading to unemployment

V. Higher productivity and its impact on wages and consumption
- Higher wages leading to increased consumption and demand for goods and services
- More incentive to seek employment, leading to more employment opportunities

VI. Capital investment and technology's impact on employment
- Increase in productivity due to capital investment and better technology
- Reduction in demand for labor due to automation and technology

VII. Conclusion
- Summary of the positive and negative effects of an increase in productivity on unemployment
- Importance of finding a balance between productivity and employment opportunities.

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