employment

Question 1

define unemployment

Answer 1

number of poeple, willing, able, and actively seeking work but not employed.

Question 2

what does labour force include

Answer 2

all those who are economically active

Question 3

What does under employment mean

Answer 3

a situtation which a individual is working less hours than it wants to.

and when workers accept jobs that dont utilise their skills

Question 4

2 methods for measuring unemployment

Answer 4

claimant count = nr of people claiming job seeker allowance

labour force survey

Question 5

some evaluation points of using claimant count to measure unemployment

Answer 5

some people are not seeking jobs but claim regardless

some do jobs in black economy but continue to claim benefits

not everyone signs up eg. self employed ppl

Question 6

pros and cons of using labour force survey , 2x,2x

Answer 6

1.Picks up trends in sectors

2.Better guide for policy makers

cons below

3. Costly to compile
4. Subject to sampling and extrapolation errors

Question 7

What are the 5 causes of enemployment

Answer 7

Structural unemployment

frictional unemployment

Seasonal unemployment

cyclical unemployment

Real wage inflexibility

Question 8

When does structural unemployment occur

Answer 8

long term shifts in the structure of the economy and its impact upon the job market

Question 9

Give an example of how structural unemployment happens

Answer 9

change in sector of economy

eg. uk going to tertiary and quartenary sectors

so skilled workers no longer have a market to work inside because the market has moved elsewhere, so they have to regain skills to work in the current markets again.

ie. coal miners dont have skills of tertiary services eg. lawyer

Question 10

How does frictional unemployment occur

Answer 10

Unemployment that occurs as workers move between jobs,

Question 11

Why does frictional unemployment happen

Answer 11

exists because workers do not have perfect and immediate information about every job opportunity that may be available to them.

Question 12

What is seasonal unemployment and when does it tend to happen

Answer 12

This occurs when workers are unemployed at different times of the year

This tends to happen in seasonal industries such as leisure and tourism and farming

Question 13

When does cyclical unemployment occur

Answer 13

when there is a negative output gap

Question 14

what does cyclical unemployment indicate

Answer 14

that demand is low

Question 15

when does Real wage inflexibility occur

Answer 15

occurs when real wage rates are above the equilibrium wage rate

Question 16

what does real wage inflexibility lead to, in terms of labour demand and supply

Answer 16

more supply of labour than there is of demand

Question 17

how can you show cyclical unemploymen on a graph

Answer 17

shift ad left. draw LRAS too.

Question 18

What is the effect of unemployment on government x3

Answer 18

1. lost output, shown by ppf, point below the ppf curve
2. increased governement spending on job seeker allowance
3. lost tax revenue because less income tax and less vat tax as less consumption

Question 19

What is the effect of unemployment on firms x3

Answer 19

less demand for g/s = less revenue

less profitability

less incentive to invest

Question 20

What is the effect of unemployment on workers x3

Answer 20

Lower living standards

Social costs - depression

Financial costs