2.1.3 Employment and Unemployment

Question 1

What is the definition of unemployed

Answer 1

Those willing and able to work, who are actively seeking work but do not have a job

Question 2

What 2 ways is unemployment measured

Answer 2

Labour force survey
Claimant Count

Question 3

How does the labour force survey measure unemployment

Answer 3

Surveys households which gives data on unemployed, employed and economically inactive

Question 4

How is Unemployment rate calculated

Answer 4

Unemployed/Economically active (Employed+Unemployed) x 100

Question 5

How does the claimant count measure unemployment

Answer 5

Total number of people claiming unemployment benefits

Question 6

What are the drawbacks of using the claimant count

Answer 6

Difficult to compare between countries
Not everyone can/will claim
Could be subject to fraud

Question 7

What are the drawbacks of using the claimant count

Answer 7

Sampling errors
Cost
Discouraged workers
Inactive groups
Underemployed

Question 8

What is the definition of Cyclical Unemployment

Answer 8

Unemployment in a recession due to a lack of AD

Question 9

Why does cyclical unemployment occur

Answer 9

As Labour is a derived demand if there is not enough demand in an economy the demand for labour falls as firms aim to reduce costs and so cyclical unemployment occurs