Unemployment

Question 1

What is frictional employment?

Answer 1

Unemployment experienced by workers between leaving one job and starting another - e.g they might be looking to improve career prospects

Depends on number of job vacancies, the level of welfare benefits, etc

Question 2

What is structural employment?

Answer 2

Caused by a decline in a certain industry or occupation - usually down to technological advancements or cheaper alternatives

May become more common in the future - as technology advances

Question 3

What is season unemployment?

Answer 3

Season unemployment results from uneven economic activity during the year - some periods are busy, others are quieter.

Tourism - In the summer is busier

Construction - less work in winter as it often prevents construction

Question 4

Costs of unemployment?

Answer 4

Unemployed have lower incomes - which means they’ll spend less and reduce profits of firms

Some resources underused as economy is not reaching maximum potential

Rise in social problems - crime rates high in areas of high unemployment

Outdated skills

Question 5

Why do governments want full employment?

Answer 5

Production will be maximised and standard of living will rise too