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Unemployment
| Question | Answer |
|---|---|
| What is the meaning of unemployment? | Those available for work at the current wage rate, but are without a job. e.g. where people are willing and able to work, but cannot find a job |
| What is the equation to calculate the labour force? | Those employed + those unemployed |
| What is calculation for unemployment rate? | (Unemployed persons/the labour force) X 100 |
| What is unemployment a good indicator for? | How easy it may be to get a job |
| What are the two measurements for unemployment? | 1. Claimant unemployment 2. Standardised unemployment |
| What is claimant unemployment? | It is a measure of all those in receipt of unemployment-related benefits |
| What is the advantage/disadvantages of using claimant unemployment as a measure of unemployment? | It is a statistic therefore easy to calculate. However excludes those who are of working age but who aren't eligible for benefits e.g. those returning to the workforce, students, and those who don't claim them |
| What is standardised unemployment? | define as people of working age who are without a job but are available to start work within two weeks and are actively seeking employment |
| What is the advantage/disadvantages of using standardised unemployment as a measure of unemployment? | The statistic is likely to be higher than claimant unemployment and is included everyone, even those not on benefits or lower to the extent that it excludes those on benefits who are not actively seeking work |
| What are five types of unemployment? | 1. Seasonal unemployment 2. Frictional unemployment 3. Search unemployment 4. Structural unemployment 5. Cyclical unemployment |
| What is seasonal unemployment? | Industries affected by the weather (Tourism and agriculture). Can cause problems for individuals but not a major problem in general |
| What is Frictional Unemployment? | Caused by people not smoothly moving fro one job to another. - not a serious problem |
| What is search unemployment? | Firms need information about the supply of labour. - Workers incur costs by looking for work, such as the time spent from looking for appropriate work and travel costs etc. Unemployment that occurs from these costs is known as search unemployment |
| What is Structural Unemployment? | Caused by damages to the structure of the economy and a dis-equilibrium in individual labour and product markets. Changes happen and the labour market is to slow to adjust. Can be caused by changes in technology or foreign competition |
| What is cyclical unemployment? | Levels on unemployment rise and fall with the level of AD. Supply side + changes to incentives, Keynesian + caused by changes in AD |
| What is the stock concept for unemployment levels | The stock concept measure the quantity at a point in time. The higher the stock of unemployment, the longer unemployment will last because there are more people competing for jobs. |
| How does the inflow and outflow of the 'stock' effect the duration of unemployment? | unemployment depends on the rate of inflow/outflow rate expressed as a number of people per time period |
| How does the phase of the business cycle effect unemployment duration? | Duration of unemployment depend on the phase of the business cycle. e.g. unemployment will rise during recession |
| How is unemployment composed? | By region - differs across countries/regions By sex by age by ethnic group |
| What is the cost of unemployment? | The country will be poorer as a result of unemployment |
| What is the foregone output? | the opportunity cost of unemployment |
| What is the output gap? | the gap between the actual and potential output |
| Why is it important to tackle unemployment? | No single solution - depends on the type of unemployment The longer someone is unemployed for, the less employable they become due to lack of motivation, skills etc. |
| What are the solutions to unemployment? | Government can tackles unemployment by -encourage worker flexibility -stimulate economy via taxes -Attract inward investment -Build export markets |
Created by:
Joph
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