6) Unemployment - MB

Question 1

Define in employment

Answer 1

(Employed) people who are either working for firms or other organisations, or self employed

Question 2

Define economically inactive

Answer 2

Those people of working age who are not looking for work, for a variety of reasons

Question 3

Define discouraged workers

Answer 3

People who have been unable to find employment and who are no longer looking for work

Question 4

Define workforce

Answer 4

People who are economically active - either in employment or unemployed

Question 5

Define unemployed

Answer 5

People who are economically active but not in employment

Question 6

Define full employment

Answer 6

A situation where people who are economically active in the workforce and are willing and able to work (at going wage rates) are able to find employment

Question 7

Define claimant count of unemployment

Answer 7

The number of people claiming JSA each month

Question 8

What is JSA?

Answer 8

Jobseeker’s Allowance, a benefit for people who are not in full-time employment (work less than 16 hours per week), are capable of working and are looking for work

Question 9

Define ILO unemployment rate (Labour Force Survey unemployment)

Answer 9

Measure of the percentage of the workforce who are without jobs, but are available for work, willing to work and looking for work

Question 10

People employed contribute to…

Answer 10

The factor of production Labour

Question 11

Full employment is a…

Answer 11

Macroeconomic policy objective

Question 12

What is the benefit of few unemployed and high level of employment ?

Answer 12

Reduce the opportunity cost of inactive Labour and leads to higher economic output

Question 13

Full employment does not mean…

Answer 13

That unemployment is zero

Question 14

Why might some people not be in employment?

Answer 14

At any given time, some people will be between jobs or searching for better employment

Question 15

What percentage is considered to be full employment?

Answer 15

In the UK below 4% unemployment could be considered full employment

Question 16

Why might full employment not necessarily be a good thing?

Answer 16

As getting additional workers is more expensive, pushing inflation, cost push inflation

Question 17

September to November 2022 estimates shows an… in the unemployment rate and a… in the economic activity rate, the employment rate was…

Answer 17

1) increase
2) decrease
3) largely unchanged

Question 18

What does LFS stand for?

Answer 18

Labour Force Survey

Question 19

How does the LFS work?

Answer 19

It is internationally organised, it is calculated by doing a survey of 60,000 households every 3 months

Question 20

Why is the LFS good?

Answer 20

It gives a fuller picture of unemployment and it is good for international comparisons

Question 21

What is a disadvantage of a LFS?

Answer 21

But LFS is a survey, not a census, so could be subject to sampling errors

Question 22

How does a claimant count work? Is it better than an LFS?

Answer 22

Is the monthly count of those actively claiming unemployment benefits, and is accurate as it is a census

Question 23

Why are comparisons between LFS and the claimant count somewhat invalid?

Answer 23

The rules for JSA change overtime, making comparisons overtime somewhat invalid

Question 24

What are the disadvantages of JSA?

Answer 24

• Many genuine unemployed do not claim due to stigma, or because they do not meet the criteria
• some who do claim may work in the informal economy