Employment + Unemployment

Question 1

What is employment?

Answer 1

the use of labour to produce goods and services in an economy

Question 2

What is unemployment?

Answer 2

a person who is wiling and able to work for the current wage rate but cannot find paid employment

Question 3

What is the labour force?

Answer 3

this includes all the people that are working and all those registered as unemployed

Question 4

name 5 economic costs of unemployment

Answer 4

1. loss of earning to the unemployed
2. when your unemployed its harder to find work
3. stress and health problems for the unemployed
4. increased government borrowing
5. less output for the economy

Question 5

What are the 2 ways to measure unemployment?

Answer 5

the claimant count
labour force part

Question 6

What is the equation to measure the rate of unemployment?

Answer 6

( number of unemployed / labour force ) x 100

Question 7

Name 4 types of unemployment

Answer 7

frictional
seasonal
cyclical
structural

Question 8

What is seasonal unemployment?

Answer 8

regular changes of employment at different times of the year

Question 9

Give an example of seasonal unemployment

Answer 9

in retail near christmas firms may higher temps due to an increase in demand this would cause a decrase in unemployment until the time is up and this would cause an increase in unemployment

Question 10

What is frictional unemployment?

Answer 10

this is unemployment cause by people moving between jobs

Question 11

What is structural unemployment?

Answer 11

this is unemployment due to a mismatch in skills

Question 12

Give an example of structural unemployment

Answer 12

an unemployed coal miner would not be able to go work in a hospital because they don’t have the education or training for it

Question 13

What is cyclical unemployment?

Answer 13

unemployment caused by a recession, a lack of demand in the product market leads to a lack of demand in the labour market

Question 14

Name 5 policies to reduce unemployment

Answer 14

monetary policy
fiscal policy
education and training
reduce benefits
regional grants

Question 15

How does education and training reduce unemployment?

Answer 15

by increasing training, labour productivity will also increase and with a better easily accessible education switching between jobs will be easier

Question 16

How do regional grants help reduce unemployment?

Answer 16

they encourage people or firms to move which reduces geographical unemployment

Question 17

What does the fiscal policy contain?

Answer 17

this cuts income tax leading consumer to have more disposable income leading to an increase in demand and therefore an increase in demand for workers as well

Question 18

What does the monetary policy contain?

Answer 18

this involves cutting interest rates this makes it cheaper to borrow. it also leads to higher consumer spending which leads to higher economic growth and therefore more demand for workers

Question 19

Name 8 impacts of unemployment

Answer 19

1. loss of earning to the unemployed
2. potential homelessness
3. geographical unemployment
4. stress + health problems of being unemployed
5. loss of human capital
6. higher government borrowing
7. lower GDP (less output in the economy)
8. increase in social problems