Camille Reyes

7, 2016
BSAT3
ECAC3

March
Assignment

1. Differentiate unemployment from underemployment which one would you

prefer. Cite an example and explain.
Unemployment occurs when a person who is actively searching for employment is
unable to find work. Unemployment is often used as a measure of the health of the
economy. The most frequently cited measure of unemployment is the
unemployment rate. This is the number of unemployed persons divided by the
number of people in the labor force. Whilst underemployment is a measure of
employment and labor utilization in the economy that looks at how well the labor
force is being utilized in terms of skills, experience and availability to work.
Example of underemployment, a watch repairman in Recto, a shoeshine boy in
Escolta. Unemployment, fresh grad students.
I think Ill choose unemployment because at least Im seeking for a job that I much
prefer rather than youre employed but you dont enjoy your work or it didnt satisfy
you what youre doing. Whats the point? If youre working for the money then
youre doing it wrong. I dont believe in work just for the sake of money. I believe in
satisfaction. In unemployment youll eventually get a job if youre dedicated on
seeking one.

2. Can the Philippines achieve zero unemployment? Explain your answer.

I think its impossible. One of the types of unemployment studied by economics is
frictional unemployment, which counts those who are seeking a new job or
changing it. Since workforce is not "binded" to workplace there will always be some
people unemployed. Further, a lot of people can be considered economically active,
but still be out of actual workforce due to certain reasons.

3. What are the positive effects of inflation on the economy? Cite an

example.
Moderate inflation enables adjustment of wages. It is argued a moderate rate of
inflation makes it easier to adjust relative wages. Inflation enables adjustment of
relative prices. Inflation can boost growth. At times of very low inflation the
economy may be stuck in a recession. Arguably targeting a higher rate of inflation
can enable a boost in economic growth.

An example of inflation is businesses raising prices to cover the increased

price of goods and services during a period of short supply in an attempt to
get the same value for their goods and services.
An example of inflation is a gallon of milk costing five dollars today when it
cost fifty cents in the 1960s.

4. What is the effect of inflation in the income of the people? Explain.

Inflation tends to reduce the standard of living through declines in the purchasing
power of money. The greater the rate of inflation, the greater the decline in the
quantity of goods we can purchase with a given income.
Low-income people may find it difficult to pay for items like housing, food and
utilities when prices of these goods rise and outpace their wages.

5. What are the solutions of the government to the decreasing purchasing

power of peso?