situation where people are working fewer hours than they wished. also refers to jobs where one doesn't fully utilise their skills e.g a graduate working in mcdonalds
significance of changes in the rates of unemployment
decrease in gov spending on benefits
demand pull inflation, higher employment, higher incomes, increase in consumption
higher cost pull inflation - firms offer higher wages to attract the best workers which increases their cost and so they put the increased cost in prices of goods/services (rise in the cost of production)
inflation decreases, lower income, less consumption and so reduces demand pull inflation pressure
lower growth, less productivity due to lower consumer income and so demand falls so firms cut wages and fire people - they wont be able to expand, less jobs available