Unemployment

Question 1

What is frictional unemployment

Answer 1

Where someone is in between jobs and frictions in the labour market delay them from getting a new job

Question 2

What is structural unemployment

Answer 2

Where changes in demand or development of new products affect people’s jobs e.g. steel workers in Sheffield

Question 3

What is cyclical unemployment

Answer 3

Unemployment which arises from a negative output gap linked to a recession

Lower economic growth ~~> fall in demand for labour ~~> rising costs of raw materials

Question 4

What is demand deficient unemployment

Answer 4

When there is insufficient aggregate demand creating a negative output gap

Question 5

What is seasonal unemployment

Answer 5

Unemployment based on tile of the year e.g. someone who drives a grit truck in the winter or holiday resorts in Spain during the winter

Question 6

What is wage inflexibility

Answer 6

Real wage is set above the equilibrium in the labour market

Question 7

What is voluntary unemployment

Answer 7

Some people may choose not to work for to seeing the benefits of not working greater than the benefits of working e.g. childcare