4.7 Employment and Unemployment

Question 1

Define frictional unemployment

Answer 1

this occurs as a result of workers leaving one job and spending time looking for a new one

Question 2

Define cyclical unemployment

Answer 2

this occurs as a result of fall in aggregate demand due to an economic recession. When demand falls, firms will cut their production and workers will lose their jobs. There will be a nation-wide rise in unemployment.

Question 3

Define structural unemployment

Answer 3

this occurs due to the long-term change in the structure of an economy. Workers end up having the wrong skills in the wrong place – causing them to be unfit for employment. This can be explained by dividing it further:

Question 4

What are 3 consequence sof unemployment

Answer 4

• ppl lose work skills
• poverty rises
• fall in living stds

Question 5

3 policite to resudec une,ployent

Answer 5

• expansionary fiscal/monetary
• depreciate exchange rate
• control inflation