conomy became so fired up that its domestic demand increased to an annual rate of almost three points above production. Their inability to keep up with the demand consequently led to another ride back to high inflation rates. This surplus in demand over national production created a rise in domestic prices and a growth in foreign purchases. Because of the supply and demand policies, (also known as overheating) subsequently, certain measures have been taken. Such measures included the reducing of the growth of demand and increasing the possible expansion of the economy. Since then, and in all regard to need, monetary and fiscal policy has been provided. To complement these policies of restrictive demand and more flexible supply, the government has tried to stimulate an income policy on several occasions. This has especially come into effect in the past five years, as Spain has been forced to live within its means and state spending has been slashed to control the soaring budget deficit. However, tourism remains its most important industry, accounting for about 4% of the GDP and employing approximately 10% of the workforce. Also accounting for a large part of the workforce are chemicals and petrol-chemicals, heavy industry, food and beverages, as well as being Europes fourth largest manufacturing country. Other growth areas besides tourism include insurance, property development, electronics, and financial services. The modern labor market in Spain has been characterized by the peak in the creation of new jobs from 1986-1990, as well as the large reduction in employment in 1992 during the following economic deceleration. Approximately two million new jobs were created during the economic expansion, which amounts to a growth rate of 3% per year. 1,100,000 people took advantage of this situation and entered the labor market during this period, 896,000 of them of whom were women. Also during this period, the average wage increase was 7.4%, c...
