CONCEPT OF

FULL
EMPLOYMENT
AND INFLATION
Presented by
Taran, Christoper S.
TOPIC OUTLINE:
The Concept of Full Employment

Types of Unemployment

Unemployment Rate in the

Philippines

Inflation
TOPIC OUTLINE:
Causes of Inflation

Types of Price Indexes

Advantages and Disadvantages

of Inflation

Inflation Rate in the Philippines

 LEARNING OBJECTIVES
To identify To explain the
To illustrate its
the the causes of
effect to the
importance of Needsan increase in
society and
full
employment 50% unemployment
rate and
economy of a
country
and inflation inflation rate
INTRODUCTION
Full employment occurs when all labor
resources are being employed as
efficiently as possible (Potters, 2023).

The rate at which prices rise over a

specified time period is known as
inflation (Oner, 2017).
FULL EMPLOYMENT
FULL EMPLOYMENT
The point of intersection between
aggregate demand (AD), short-run
aggregate supply (SRAS), and long-run
aggregate supply (LRAS) are when full
employment is achieved and the economy
operates at its maximum capacity
(Saravanakumar, n.d.).
TYPES OF UNEMPLOYMENT
Structural Frictional
unemployment Unemployment

Cyclical Seasonal
Unemployment Unemployment
 POSSIBLE EFFECTS IN THE ECONOMY
Economic Aspect Full employment impact unemployment impact

Human resource waste that

Optimum use of all labor
Resource Utilisation could result in a decline in
resources available
productivity

Increased GDP as a result Reduced output leads to a

Economic Output
of maximized production GDP that has negative growth

Possible rise if supply Potential decline brought on

Inflation
exceeds demand by a drop in demand
UNEMPLOYMENT RATE IN THE PHILIPPINES
LABOR FORCE EMPLOYMENT UNDEREMPLOYMENT UNEMPLOYMENT
philiPPINES
PARTICIPATION RATE RATE RATE RATE

2019 61.3 94.9 13.8 5.1

2020 59.5 89.7 16.2 10.3

2021 63.3 92.2 15.9 7.8

2022 64.7 94.6 14.2 5.4

2023 64.9 95.7 12.6 4.3

 INFLATION
Price increases are known as inflation, which is
referred to as the gradual loss of purchasing
power.

Hyperinflation happens when the country's

currency depreciates quickly and inflation
increases dramatically.

Stagflation happens when a nation's

unemployment rate rises and inflation stays high
despite the nation's economy not expanding.
CAUSES OF INFLATION
TYPES OF PRICE
INDEXES
The Consumer Price Index (CPI) is
based on a representative basket of
products and services and tracks
changes in consumer prices over time.
(Fernando, 2024)

A wholesale pricing index (WPI)

tracks overall change in producer
prices over time.
TYPES OF PRICE
INDEXES
The Producer Price Index (PPI)
tracks changes in the prices
given to manufacturers of goods
and services.
ADVANTAGES
Enhances economic growth

Enables wage adjustment

Offers ease of borrowing

Causes employment rates to

increase
DISADVANTAGES
Impacts savings

Curbs business investment

Affects competition

Affects pensioners and

minimum wage earners
INFLATION RATE IN THE PHILIPPINES
 CONCLUSION
This implies that unemployment decreases
as inflation increases. Conversely, lower
inflation is correlated with higher
unemployment.

Achieving and maintaining full employment

is crucial for societal well-being while
keeping inflation in check is essential for
price stability and the purchasing power of
individuals
 THANK YOU
FOR LISTENING
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