2.1.3 Employment and unemployment

Question 1

Claimant count

Answer 1

The number of people claiming unemployment related benefits

Question 2

Cyclical / Demand deficient unemployment

Answer 2

Unemployment caused by a persistent lack of aggregate demand for goods and services, when national output is smaller than potential output leading to a negative output gap.
Most likely to happen in a slowdown or a recession

Question 3

Discouraged workers

Answer 3

People out of work for a long time who give up on job search and who become economically inactive in the labour market

Question 4

Disguised/hidden unemployment

Answer 4

Where part of the labour force is either left without work or is working in a redundant manner where worker productivity is essentially zero

Question 5

Economically active

Answer 5

Those who are unemployed and actively seeking employment

Question 6

Economically inactive

Answer 6

those who are of working age but are neither in work nor actively seeking work

Question 7

Frictional unemployment

Answer 7

Those moving between jobs. This typically lasts for up to 6 months.

Question 8

Full employment

Answer 8

When that is enough job vacancies for all the unemployed to take work

Question 9

Human capital

Answer 9

A measure of an individuals ability to produce something of economic value.
Measured through their skills, knowledge, abilities, social attributes, personalities and health attributes

Question 10

Inactivity

Answer 10

The state of not producing an economic output

Question 11

International Labour Organisation (ILO)

Answer 11

A United Nations agency whose mandate is to advance social justice and promote decent work by setting international labour standards

Question 12

Job search

Answer 12

Process by which workers find appropriate jobs given their tastes and skills

Question 13

Labour force survey (LFS)

Answer 13

A study of the unemployment circumstances of the UK population. It is the largest household study in the UK and provides the official measures of employment and unemployment

Question 14

Labour shortages

Answer 14

When businesses find it difficult to recruit the skilled workers they need

Question 15

Labour supply

Answer 15

The number of people able, available and willing to work at prevailing wage rates

Question 16

Migration

Answer 16

The movement of people from one geographical location to another with the intentions of settling in the new region

Question 17

Net inward migration

Answer 17

when the number of migrants coming into a country is higher than those leaving in a given time period – usually a year.

Question 18

Real wage

Answer 18

Nominal wage adjusted for the effects of inflation

Question 19

Redundancy

Answer 19

making someone redundant is to end their paid employment because the services of an employee are no longer required by the business

Question 20

Seasonal unemployment

Answer 20

When people are unemployed at particular times of the year when demand for labour is lower than usual

Question 21

Structural unemployment

Answer 21

unemployment that results from the decline in an industry which leaves people unemployed because they do not have the skills needed by industries that are growing

Question 22

Tight labour market

Answer 22

When demand for labour is high and there are shortages of labour

Question 23

Under employment

Answer 23

Workers are unemployed when they are willing to supply more hours of work than their employers are prepared to offer

Question 24

Unemployment rate

Answer 24

The proportion of economically active population who are unemployed

Question 25

Unemployment trap

Answer 25

When the prospectus of the loss of unemployment benefits this way doors without work from taking a new job – creates a disincentives problem

Question 26

Unit wage costs

Answer 26

Labour costs per unit of output

Question 27

Zero hours contract

Answer 27

Unemployment contract under which the employee is not guaranteed work and is paid only for work carried out

Question 28

Balance of payments

Answer 28

A record of all financial transactions between an economy and the rest of the world

Question 29

Balance of trade

Answer 29

The difference between the value of a countries export and imports of goods and services combined

Question 30

Capital / Financial account

Answer 30

a record of the inflows and outflows of capital that directly affect a nation’s foreign assets and liabilities.

Question 31

Current account

Answer 31

measures the difference between money and credit going in and out of an economy (through exports, imports and income paid on assets both domestically and abroad)

Question 32

Current account deficit

Answer 32

when net external trade and income is negative leading to a net outflow of demand from the circular flow

Question 33

Current account surplus

Answer 33

when external trade and income is positive, a net injection into the circular flow

Question 34

Cyclical trade deficit

Answer 34

A trade deficit that arises purely due to changes in the business cycle

Question 35

Exchange rate

Answer 35

The price of one countries currency in relation to another

Question 36

Export revenue

Answer 36

Sales from selling goods and services overseas, an injection of aggregate demand

Question 37

External competitiveness

Answer 37

The ability of a business to sell their goods and services at competitive prices in a foreign country/overseas market

Question 38

Hot money

Answer 38

Money that flows freely and quickly around the world looking to earn the best rate of return

Question 39

Net primary income

Answer 39

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Question 40

Net secondary income

Answer 40

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Question 41

Net trade

Answer 41

The balance between the monetary value of exports and imports

Question 42

Overseas assets

Answer 42

Assets owned in overseas countries which might generate a flow of primary income which is a credit item on the current account

Question 43

Overseas assets

Answer 43

Assets owned in overseas countries which might generate a flow of primary income which is a credit item on the current account

Question 44

Protectionism

Answer 44

restricting trade through tariffs and other forms of import controls such as quotas

Question 45

Purchasing power

Answer 45

The buying power of a unit of currency. It is inversely related to the rate of inflation.

Question 46

Remittances

Answer 46

funds that migrants send back to their home countries

Question 47

Structural trade deficit

Answer 47

A trade deficit that arises due to supply side weakness rather than a change in GDP or currency – usually caused by poor price and non-price competitiveness

Question 48

Trade deficit

Answer 48

occurs when a country imports a greater value of goods and services than exports.