3.2(2) Full Employment

Question 1

Full employment

Answer 1

A situation that indicates a non-zero, low rate of unemployment when all who are willing and able to work have gained employment.

Question 2

Unemployment

Answer 2

A situation where people of legal working age are not working, but are available for work and actively seeking work.

Question 3

Structural unemployment

Answer 3

Occurs due to mismatch of skills between unemployed workers and those required by available jobs.

Question 4

Occupational immobility

Answer 4

Inability of factors of production to move from one occupation or sector to another.

Question 5

Geographical immobility

Answer 5

Inability or lack of willingness of factors of production to move from one geographical area to another.

Question 6

Frictional unemployment

Answer 6

Occurs due to imperfect information, where employers are not fully informed about the skill levels of available labour, while workers are not fully informed about the available jobs and what they entail.

Question 7

Real wage unemployment

Answer 7

Occurs due to wages being set above the free market equilibrium wage.