43 employment and Unemployment

Question 1

Full employment

Answer 1

Highest level of employment possible

Question 2

Efficiency and inefficiency

Answer 2

If market has full employment it will be producing efficiently and will be productively efficient on the PPC

Question 3

Equilibrium for employment?

Answer 3

Ad for labour=AS labour

Question 4

Voluntary Unemployment?

Answer 4

Workers aren’t willing to work at current wage

Question 5

AS of labour is above of AD at the current wage, what happens?

Answer 5

Disequilibrium of employment

Question 6

What is natural rate of employment?

Answer 6

Rate of employment that exists when ADL =ASL at current wage and price level

Question 8

Labour mobility

Answer 8

Ability of workers to change where they work

Question 9

Occupational mobility

Answer 9

Ability for workers to move from once occupation to another

Question 10

Geographical mobility

Answer 10

Ability for workers to join a job from one location to another

Question 11

Policies to reduce unemployment

Answer 11

Reduction in direct and indirect tax
Cut in corporate tax increase gov spending
Reduce interest rate

Question 12

How to reduce natural rate of unemployment

Answer 12

Widen gap between low pay and unemployment benefit

Remove any restrictions on the amount firms can pay workers

Improve education and training

Question 13

Frictional unemployment

Answer 13

: Short-term unemployment when people are between jobs

Question 14

Structural unemployment

Answer 14

: Long-term unemployment caused by a mismatch between skills and job requirements.