unemployment

Question 1

what is unemployment

Answer 1

the state of being willing and able to work but not having a job

Question 2

two ways to measure unemployment

Answer 2

claimant count
labour force survey

Question 3

Claimant count

Answer 3

based off of those claiming unemployment benefits:
-cheap and quick
-not very accurate( excludes those who are unemployed with high incomes and those who claim when they shouldn’t)

Question 4

what is a labour force survey

Answer 4

based on a survey of people who are actively seeking jobs
- more widely used
-more accurate
-expensive and time consuming
uses the International Labour Organistion (ILO) defintiion of unemployment

Question 5

what is level of unemployment

Answer 5

the number of workers who are unemployed

Question 6

what is the unemployment rate

Answer 6

unemployed workers as a percentage of the labour force

Question 7

unemployment rate calculation

Answer 7

n0. unemployed/
no. people in labour force x100

Question 8

reasons why people may enter the labour force

Answer 8

-left school or uni
-migrated
-stopped being a homemaker

Question 9

reasons why people may leave the labour force

Answer 9

-continued higher education
-became ill
-emigrated

Question 10

what is the labour force

Answer 10

the total number of workers who are available for work

Question 11

3 main types of unemployment

Answer 11

Frictional unemployment
structural unemployment
cyclical unemployment

Question 12

frictional unemployment

Answer 12

temporary unemployment arising when workers are in-between jobs

Question 13

different forms of frictional unemployment

Answer 13

-voluntary: choosing not to accept jobs at going wage rate

-search: when people spend time looking for job

-seasonal: occurs at specific times of the year when demand falls

-involuntary

Question 14

structural unemployment

Answer 14

caused as a result of the changing structure of the economy

-could be: changes in sectors, method of production, changes in time for demand and supply

Question 15

different forms of structural unemployment

Answer 15

Regional: decline in job vacancies in a particular area of the country

technological: occurs due to advances in technology
(switching to capital intensive)

international: occurs when a country loses their international competitiveness in producing a product

Question 16

what is cyclical unemployment

Answer 16

results due to a lack of Aggregate demand

Question 17

negative consequences of unemployment

Answer 17

-less income, lower living standards

-hysterisis: tendency for unemployment to lead to long run unemployment
unemployed are demotivated lose confidence in
finding another job

-increased unemployment benefits( higher taxes)

-income inequality

-regional: enterprising people may move away reducing chance of future employment

Question 18

positive consequences of unemployment

Answer 18

firms looking to expand have a greater choice

lower cost of labour

firms may benefit from workers not asking for a wage rise out of fear of losing their jobs