2B

Question 1

What is unemployment

Answer 1

The number or percentage of people who are able and willing to work but do not have a job.

Question 2

What is Frictional U

Answer 2

Occurs when people are between jobs.

Question 3

What is seasonal U

Answer 3

Occurs when jobs are dependent on the time of year
e.g ski instructor

Question 4

What is voluntary unemployment

Answer 4

Unemployment which is deliberately chosen by the person unemployed

Question 5

What is cyclical unemployment

Answer 5

Occurs when there is a fall in aggregate demand in the economy and is associated within the economic cycle.

Question 6

What is structural U

Answer 6

Results from a lack of demand for the skills that a group of workers offer.

Question 7

What is LFS

Answer 7

Labour force survey

Question 8

What is classed as unemployed in the LFS survey

Answer 8

Anyone without job, available to start work. has been looking in the last 4 weeks.

Question 9

How many households is the LFS sent out to

Answer 9

6000 households and is easy to compare to other countries.

Question 10

What is the Claimant count

Answer 10

Counts how many people claim U benefits.

Question 11

How often is the claimant count produced

Answer 11

Monthly

Question 12

dis of claimant count

Answer 12

not as easy to compare with other countries, open to manipulation and fraud. Some people don’t want to/cant claim.

Question 13

dis of claimant count

Answer 13

not as easy to compare with other countries, open to manipulation and fraud. Some people don’t want to/cant claim.

Question 14

What is underemployment

Answer 14

Means that the job you have is inadequate for your skill set

Question 15

Benefits of Unemployment

Answer 15

-more family time
-Opportunity to retain/search for more sustainable jobs
-Less inflation pressure
-Larger pool of workers for firms

Question 16

Negatives of unemployment

Answer 16

-loss of income/ living standards
- Loss of output/inefficient use of resources.
-producing inside ppc
- Loss of tax revenue
-Gov spending on U benefits increases.
-Health problems, strain on the NHS
-Hysteresis
-More crime

Question 17

Evaluating the significance of U

Answer 17

Depends on type of U
depends on rate
depends on size of benefits
depend son distribution of U (geographically and demographically)

Question 18

What is inflation

Answer 18

A sustained increase in the average price level of an economy.

Question 19

What is the target inflation

Answer 19

2%(+/- 1%)

Question 20

What is CPI

Answer 20

Consumer price index, main measure of inflation in the UK

Question 21

What does CPI measure

Answer 21

Changes in the cost of living of a typical household.

Question 22

how many goods/services are in the basket of goods

Answer 22

700

Question 23

How often is the basket of goods updated

Answer 23

yearly via the expenditure survey

Question 24

What is the RPI

Answer 24

Measures inflation but includes housing costs. e.g mortgage payments

Question 25

What is disinflation

Answer 25

Falling level of inflation

Question 26

What is deflation

Answer 26

Negative inflation

Question 27

Why is it difficult to measure inflation

Answer 27

price changes may be as a result of quantity increases, many discounted places such as charity shops are not accounted for. Difficult to compare years when basket of goods changes

Question 28

what is demand pull inflation

Answer 28

Occurs when aggregate demand is growing at a unsustainable rate leading to increases pressure on scarce resources and a positive output gap. When there is excess demand, producers can raise their prices and achieve bigger profit margins. Demand-pull inflation is likely when there is full employment of resources.

Question 29

What is cost push inflation

Answer 29

Occurs when firms respond to rising costs by increasing prices in order to protect their profit

Question 30

What is cost push inflation mainly caused by

Answer 30

rising labour costs, Higher prices for raw materials, increase in business taxes

Question 31

Benefits to inflation

Answer 31

Could be associated with GDP growth. Wages my well rise, borrowers benefit-repayment worth less.

Question 32

significance of inflation

Answer 32

Depends on rate of inflation
depends if wages are constant.
depends on inflation in other countries.
depends on cause-cost push or demand pull.
Depends on stage in business cycle-inflation have higher impact in a recession.