Ch27 Unemployment Flashcards
What is unemployment?
When those actively seeking and able to work are unable to find a job
How do you calculate the rate of unemployment?
Unemployed/ Labour force x100
What is cyclical unemployment?
Unemployment caused by falling demand as a result of a downturn in the economic cycle. This will continue to worsen as the economy goes into a depression or a recession. People lose their jobs due to demands for goods and services falling.
What is structural unemployment?
Unemployment caused by changes in the structure of the economy such as the decline in an industry. e,.g Machines taking over jobs or jobs going out of favour
What is seasonal unemployment?
Unemployment caused when seasonal workers, such as those in the holiday industry, are laid off because the season has ended
What is frictional unemployment?
When workers are unemployed for a short time as they move from one job to another.
What is voluntary unemployment?
Unemployment from people choosing not to work e.g stay at home parents
What are the impacts of unemployment on output?
If people are unemployed, the country would not be able to output at maximum capacity. Therefore levels of output are lower than what actually could be.
What are the impacts of unemployment on use of resources?
People who do not work do not contribute towards production. Therefore this is a waste in resources and results in lower levels of national output
What are the impacts of unemployment on poverty?
Employment is never a problem in developing countries as they do not work regularly. But in developed countries, unemployment could lease to a rise in poverty as people are unable to pay for their necessities, some leading to homelessness
What are the impacts of unemployment on government spending on benefits?
In most developed countries, when people are unemployed they will recieve government benefits. If this gets out of hand the government would have to spend a lot of money on these benefits.
What are the impacts of unemployment on tax revenue?
As most taxes are linked to income and spending tax revenue will go down.
What are the impacts of unemployment on consumer confidence?
Consumer confidence will go down as people without jobs will rely on government benefits as their source of income and will lose confidence and play a less significant role in the economy
What are the impacts of unemployment on business confidence?
-Increasing unemployment rates would lead to decreased business confidence as unemployment links to income and spending.
- If they rely more on unemployment benefits, demand will fall
