3.2 Low unemployment

Question 1

Employment definition

Answer 1

The use of labour to produce goods and services

Question 2

Unemployment definiton

Answer 2

When workers are willing and able to work at the current wage rates but are unable to find paid employment.

Question 3

Labour force definition

Answer 3

Includes all those people in work and those registered as unemployed.

Question 4

Level of unemployment =

Answer 4

the number of people who are unemployed

Question 5

Rate of unemployment =

Answer 5

no. of people unemployed / labour force x 100

Question 6

Seasonal Unemployment

Answer 6

Results from regular changes in employment/labour demand at different times of the year.

Question 7

Frictional unemployment

Answer 7

Results from people moving between jobs

Question 8

Structural unemployment

Answer 8

Caused by a permanent decline of an industry or industries

Question 9

Cyclical unemployment

Answer 9

Unemployment caused by a lack of demand

Question 10

Benefits of unemployment

Answer 10

Wages can be kept low as there is more labour to choose from

Costs are lower for firms making them more competitive