2.1.3 Unemployment ✅

Question 1

What are the two ways that measure unemployment?

Answer 1

Claimant count = number of people receiving benefits.
labour force survey = sample of people who are asked as about personal circumstances/activity.

Question 2

Negative of claimant count and labour force survey?

Answer 2

Claimant - stricter requirements (over 18, can’t have partner working).
Labour survey - can be prone to statistical error.

Question 3

Positive of claimant count and labour force survey?

Answer 3

Claimant count - not prone to statistical error.
Labour survey - used across the world (good for unemployment comparison).

Question 4

Difference between unemployment and underemployment?

Answer 4

Unemployment is when those willing to work can’t find a job however underemployment is those working who can’t find a job for their level of experience/qualification or enough hours.

Question 5

Define employed?

Answer 5

Those who are working 1+ hours per week paid, min 15+ hours per week unpaid work for family business, is temporarily away from work, on gov support training scheme.

Question 6

define inactive in an economy?

Answer 6

Neither employed or unemployed (not participating in job market).

Question 7

Define unemployed?

Answer 7

Someone wishing working age who is actively searching but can’t find a job for the past 4 weeks, are prepared to start work within 2 weeks.

Question 8

How do you calculate the rate of unemployment?

Answer 8

Unemployed/ work forces X 100

Question 9

How to calculate inactive rate?

Answer 9

Unemployed plus not working/ population of working age

Question 10

How to calculate activity rate?

Answer 10

Economically active/ population of working age X100

Question 11

What is the difference between the classic and Keynesian view on unemployment

Answer 11

Classic view focuses on market sorting it out however Keynesian focuses on AD controlling unemployment.

Question 12

Name the cases of unemployment?

Answer 12

• seasonal
• structural
• frictional
• Cyclical
• real wage inflexibility

Question 13

What is structural unemployment?

Answer 13

• geographically in mobile (not willing to move to get a job).
• occupation in mobility (lack desirable skills).

Reginald unemployment - area loses job due to decline in industry

Question 14

What unemployment is transitional between jobs? How can this be reduced?

Answer 14

Frictional unemployment.

Career advice.

Question 15

What is cyclical unemployment?

Answer 15

Demand deficiency (decrease in AD) so as a reaction to this firms reduce labour to suit demand.

Question 16

Draw the two graphs that can show cyclical unemployment?

Answer 16

1) ppf inward shift
2) ad diagram decreasing

Question 17

What is real wage inflexibility?

Answer 17

Excess supply of labour as wages are put above the equilibrium price (min wage) which leads to cuts.

Question 18

What can cause changes in the rate of unemployment?

Answer 18

• immigration or migration
• state retirement age
• level in taxes or benefits
• number of school students going to higher education

Question 19

Why is increased employment a significance? What does it indicate?

Answer 19

• more tax collection (vat as people buy more)
• pay less benefits
• increased income

Econ growth

Question 20

What are significance of migration to unemployment?

Answer 20

• Provides more jobs due to circular flow of income.
• Leads to lower wages particularly in low skill jobs (excess supply).

Question 21

How are skills significant to unemployment?

Answer 21

• Developing economies require high skills for workforce.
• highly skilled workforce = more adaptable less prone to unemployment.

Question 22

Name impacts of unemployment on all economic agent?
Workers, firms, consumers, government.

Answer 22

Check notes.

Question 23

Name the effects of unemployment to society as a whole?

Answer 23

• Social deprivation (more crime and divorce, bad health).
• Further loss of jobs (workers lose demand).
• Decrease in PPF.
• Decrease in national output.

Question 24

What do unemployment calculations miss? Give examples.

Answer 24

Hidden unemployment.
- On gov training scheme but want job.
- working part-time but want full.

Question 25

What are the significance of changes in activity? (Active/inactive)

Answer 25

• Increase = decrease size of labour force thus fall in productive potential of country. (Lower GDP/tax rev).
• Decrease = more unemployment if there r no jobs available.

Question 26

What does high inactive rate indicate?

Answer 26

Lack of job opportunities or demographic factors.

Question 27

Example of structural unemployment?

Answer 27

After 2008 crisis manufacturing workers found it difficult to find jobs in tech sector.