What are the advantages and disadvantages of high employment?

Answer 1

increased standard of living as a result of greater disposable incomes. this may result in greater spending on goods and services, which has a multiplier effect. One of the benefits of this is increased overall output and increased economic growth, which has a number of benefits, such as increased foreign direct investment which could be in the form of multinational companies setting up, for example. This has a number of benefits, MNC's could introduce more competition which leads to higher efficiency, however, this may wipe out domestic firms. In addition, the government might get more revenue in taxes in the form of greater spending (indirect taxes) and direct taxes.

However, high unemployment might upset the country's balance of payments account. It may also lead to demand pull and cost push inflation. Hope this helped, it is a bit condensed.

Source:

BA. Economics Yale University

MBA Wharton School, University of Pennsylvania