13 - unemployment Flashcards
natural rate of unemployment
the unemployment that exists when aggregate demand for labour equals aggregate supply, that is voluntary, frictional unemployment
frictional unemployment
workers moving between jobs
structural unemployment
unemployment due to a change in the pattern of demand and production
equilibrium unemployment
when aggregate demand for labour equals aggregate supply of labour
geographical immobility
the inability of a factor of production, usually labour, to move where jobs exist
unemployment trap
where the income tax and benefit system reduces the net increase in income people can expect from taking paid work, thus many people would not choose to take a job
replacement ratio
unemployment benefits divided by the income an unemployed worker could receive if in work
casual unemployment
a kind of frictional unemployment occurring when workers are laid off on a short-term basis
seasonal unemployment
casual unemployment resulting from seasonal fluctuuations in demand
deindustrialisation
a fall in the proportion of national output accounted for by the manufacturing sector of the economy
technological unemployment
unemployment due to the introduction of labour-saving technology
cyclical (or demand-deficient) unemployment
unemployment due to a lack of aggregate demand
involuntary unemployment
when a worker is willing to accept a job at the going wage rate but is not offered one
classical (or real wage) unemployment
results for real wages being above the market clearing level, creating an excess supply of labour
phillips curve
an economic model that shows trade off between inflation and unemployment
stagflation
the coexistence of high levels of inflation and unemployment
adaptive expectations
where decisions about the future are based upon past information
NAIRU
the non accelerating inflation rate of unemployment, that is, the level of unemployment at which there is no tendency for inflation to accelerate
globalisation
worldwide growth of multinational companies, international integration, the spread of free markets and policies of liberalisation and free trade
