aos2 employment Flashcards
(18 cards)
goal of full employment
to achieve the lowest rate of unemployment without creating unacceptable inflationary or external pressures. considered around 4.5%
(if inflation was outside target of 2-3% the goal would not be achieved)
labour force
all employed and unemployed persons within an economy added together
employed
person aged 15 or older who worked at least 1 hour in the survey week
unemployed
person aged 15 or older who is actively seeking work
hidden unemployed
people not considered unemployed, and are not looking for work BUT would accept employment if offered
long term unemployed
has been looking for work for a year or longer
cyclinical unemployment
unemployment caused by flunctionation in Agregrate demand.
AD up is a signal businesses to increase production and therefore hire more.
AD down, signal to slow production and reduce labour
structual unemployment
caused on the supply side of changing business conditions. for example, replacing labour with technology (self serve)
frictional unemployment
when people move between jobs in the labour market or transition into and out of labour force
not meeting full employment on tax revenue
if to high, the government will be collecting less revenue from income and business profits and outlying more unemployment benefits
unemployment on inflation TOO LOW
When unemployment is to low, too many people working, it can increase AD faster than AS can maintain and cause shortages putting upward pressure on prices (demand inflation)
unemployment on GDP
When unemployment is to high. Not many people working
Productive capacity overall production is lower, reducsong economic growth
When unemployment is to low. Too many people working
Production may increase at a rate that is too fast (unsustainable) and may lead to inflationary pressures and environmental damage
unemployment on LIVING STANDERDS
When unemployment is too high, meaning not many people working, Matieral living standerds will worsen as average income falls
NON-material living standards will worsen as stress increases (worried 4 future and crime increases)
underutilization rate formula
((unemployed+underemployed)/labour force) * 100
unemployment rate formula
(unemployed persons/labour force) * 100
the participation rate formula
(labour force/people over 15 in the population) * 100
underemployed
employed but working less hours than ideal
labour force
consists of all individuals 15 or over who are employed or unemployed
