2.3 - employment

Question 1

Employment

Answer 1

People who are willing and able to work and are of working age and in paid work

Question 2

Unemployment

Answer 2

People without a job but are willing and able to work

Question 3

Working population

Answer 3

All those of working age in an economy

Question 4

Employment rate

Answer 4

% of working population who are employed

Question 5

Labour Force

Answer 5

Everyone employed + unemployed in an economy
All those willing and able to work

Question 6

Full employment

Answer 6

When all willing + able to work at the current price are in work

Question 7

Economically inactive

Answer 7

Those unwilling / unable to work

Question 8

Labour force survey

Answer 8

Considered unemployed if you are out of work but:
- Have sought work in last 4 weeks / could start work in 2 weeks
- Have a job and are starting in next 2 weeks

Question 9

How is the LFS done

Answer 9

Face-to-face interviews with 60,000 households

Question 10

Strengths of LFS

Answer 10

More accurate than claimant count
Little chance of inaccuracies - f2f
Can compare between countries

Question 11

Weaknesses of LFS

Answer 11

Occurs every 3 months - OOD
More expensive
More time consuming

Question 12

Claimant count

Answer 12

Worked out by how many seek benefits
Must prove they are seeking work if they are claiming benefits

Question 13

Strengths of claimant count

Answer 13

Easy
Cost effective
Monthly - more up to date

Question 14

Weaknesses of claimant count

Answer 14

Does not account for all unemployed - some may not claim benefits
Errors - some may claim when they do not qualify

Question 15

Employment rate calculation

Answer 15

Employment / working age pop x100

Question 16

Rate of unemployment Calculation

Answer 16

Unemployed / labour force x100

Question 17

Labour Force Participation Rate

Answer 17

Labour force / working age pop x100

Question 18

Effects of full employment

Answer 18

Greater productivity for firms
Higher AD - C + X + I rises
Increased confidence across the economy

Question 19

Cyclical unemployment

Answer 19

Occurs due to lack of AD / neg economic growth

Question 20

Structural unemploymnet

Answer 20

Decline in no. industries / firms due to changes in demand

Question 21

Technological unemployment

Answer 21

New technologies replacing the role of workers

Question 22

Regional unemployment

Answer 22

Structural unemployment in certain areas

Question 23

Frictional unemployment

Answer 23

Unemployment between jobs
Search - time looking for best job
Seasonal - labour demanded only at certain times
Casual - out of work at irregular times between employment

Question 24

Classical

Answer 24

Caused by wages driven up = surplus of labour

Question 25

Effects of unemployment on the economy

Answer 25

Reduction in C
Rise in gov expenditure = rising taxes
Falling inflation

Question 26

Effects of unemployment on businesses

Answer 26

Less human capital = lower production
Fall in cost of production - less wages to pay
Low productivity - workers worried ab job security

Question 27

Consequences of unemployment on individuals

Answer 27

Less spending
Decreased job security
Fall in standard of living