ECONS: UNEMPLOYMENT

Question 1

EMPLOYMENT

Answer 1

BEING INVOLVED IN PRODUCTIVE ACTIVITY FOR WHICH A PAYMENT IS RECEIVED

Question 2

UNEMPLOYMENT

Answer 2

the number of people

registered as being without work, EVEN THOUGH THEY ARE ABLE TO WORK

Question 3

FLEXIBLE LABOUR FORCE

Answer 3

a labour force that adjusts to changes in market conditions quickly and smoothly

Question 4

informal economy

Answer 4

people or businesses not protected or regulated by the state

Question 5

formal economy

Answer 5

people who are regulated by the government

Question 6

LABOUR FORCE

Answer 6

the total number of people
of working age in work or actively seeking
work.

Question 7

THE UNEMPLOYMENT RATE

Answer 7

number of
unemployed workers divided by the total
labour force of a country.

Question 8

FRICTIONAL unemployment

Answer 8

people who are in between jobs (due to reasons such as, they don’t like their job, move to higher paid
jobs, move their homes, made redundant). these people do not stay unemployed for long

Question 9

structural employment

Answer 9

unemployment caused by long term changes in demand patterns and methods of production (ex: industries closing down)

Question 10

seasonal unemployment

Answer 10

happens because
consumer demand for some goods and
services is seasonal.

Question 11

cyclical unemployment

Answer 11

happens when demand is too low

Question 12

causes of unemployment

Answer 12

1. structural changes of an economy
2. technological advancement
3. trade union activities

Question 13

consequences of unemployment

Answer 13

1. waste of resources
2. Increased dependence on government support; Increased G-spending
3. mental distress for the unemployed

Question 14

factors that increase supply of labour

Answer 14

1. increased birth rate
2. increase in labour mobility
3. increase in migration
4. fall in school leaving age
5. rise in retirement age

Question 15

FACTORS THAT INTERFERE WITH THE LABOUR MARKET

Answer 15

1. powerful trade unions that demand wages
   that are too high
2. Benefits paid to the unemployed reduces
   incentives to work
3. Other employment costs are too high.
4. Lack of job information
5. Minimum wage laws
6. Immobility of labour

Question 16

GOVERNMENT POLICIES WHICH PROMOTE EMPLOYMENT

Answer 16

FISCAL POLICY: reduced TAXES, increased GOVERNMENT-spending (expansionary)
MONETARY POLICY : reduced interest rates (expansionary)
SUPPLY - SIDE POLICIES: increased subsidies, reduced corporate taxes, improved training,
policies that promote competition in the market, encouraging start ups