3.2 Low unemployment

Question 1

Unemployment

Answer 1

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

Question 2

Employment

Answer 2

The use of labour in the economy to produce goods and services

Question 3

How is unemployment measured in the UK

Answer 3

It is measured by the claimant count

Question 4

What is the claimant count

Answer 4

A method of measuring unemployment according to the number of people who are claiming unemployment related benefits

Question 5

Level of unemployment

Answer 5

The number of people who are unemployed in a country

Question 6

Rate of unemployment

Answer 6

The percentage of people in a workforce who are unemploted

Question 7

Name 4 types of unemployment

Answer 7

Seasonal
Frictional
Cyclical
Structural

Question 8

Seasonal unemployment
With 1 example

Answer 8

Caused by a fall in demand for a certain job during a particular season.
Example is a mall santa

Question 9

Frictional unemployment
With 1 example

Answer 9

Unemployment cause by time lags when workers move between jobs
Example is a person moving from accountant to lawyer

Question 10

Structural unemployment
With 1 example

Answer 10

Unemployment caused by the permanent decline of an industry
Example is coal miners as they are being replaced by machines

Question 11

Cyclical unemployment
With 1 example

Answer 11

Unemployment caused by the overall decrease in aggregate demand in an economy, often seen in recessions
Example is people losing jobs in 2008

Question 12

What are 2 benefits of unemployment

Answer 12

Wage rates will decrease
Because wage rates decrease, firms are more competitive, and can compete with overseas firms as well.

Question 13

What are the costs of unemployment to individuals

Answer 13

• Lower living standards
• Loss of self esteem and status- can lead to a break down of relationships
• Cost to taxpayers- their taxes are going towards more unemployment benefits

Question 14

What are the costs of unemployment to the government

Answer 14

• Labour resources are wasted so the economy can’t be at full capacity
• High unemployment leads to more unemployment which could lead to a recession
• There could be a budget defecitbecause tey are producing less
• Tax revenue is lost from consumers so they are able to spend less

Question 15

What are the costs of unemployment to regions

Answer 15

• Could become places with lower welfare
• Reduces quality of life for citizens in that area
• Crime rate could increase because people need to steal to survive