employment and unemployment

Question 1

unemployment definition

Answer 1

occurs when there are people who do not have a job but are willing to work

Question 2

how can unemployment be calculated

Answer 2

amount of JSA claimants
labour force survey

Question 3

real wage unemployment

Answer 3

a measure of people who are not willing to work at the going wage rate

Question 4

demand defficient unemployment

Answer 4

caused by a lack of AD in an economy such as during a recession
lack of business confidence
increase in the value of the currency

Question 5

lras daiagram analysis

Answer 5

gpl too high, economy shrinks as no one spends
unemployment has risen
consumer and business confidence falls= less I
economy not at full capacity
no taxes coming in due to less rev so less govt spendingh

Question 6

how can demand defficient unemployment be reduced

Answer 6

keynsian argument that govt spending is responsible to increase AD to fix the issue

Question 7

structural unemployment

Answer 7

a measure of workers who lose jobs in a declining industry and do not have the skills to join another industry

Question 8

how can structural unemployment be reduced

Answer 8

govt subsides training and education

Question 9

frictional unemployment

Answer 9

a measure of people who are between jobs, and is generally a sign of a healthy and flexible labour market. it is seen as voluntary unemployment

Question 10

how could frictional unemployment be reduced

Answer 10

increase wages across the economy
provide training to expand skills

Question 11

seasonal unemployment

Answer 11

a measure of people who only have jobs at a certain time of the year, common in tourism related job

Question 12

demand side factors

Answer 12

strength of AD in the economy
the cost of wages
changes in the exchange rate and growth in trading partner countries
changes on govt spending and taxation

Question 13

supply side factors

Answer 13

skills of the labour force
changes in geographical mobility
changes in net migration
changes in retirement/school leaving age

Question 14

what determines natural rate of unemployment

Answer 14

benefits
available job info
skills and education
degree of labour mobility
hysterisis

Question 15

how to reduce the natural rate unemployment

Answer 15

better education and training to improve occupational mobility
make it easier for firms to relocate
reducing NMW and trade unions