Employment And Unemployment (Macro)

Question 1

What types of unemployment are there?

Answer 1

Structural 
Frictional
Seasonal
Cyclical 
Real wage inflexibility

Question 2

What is structural unemployment?

Answer 2

When long term shifts in the structure of the economy impact the job market like edging towards the tertiary sector so there are primary and secondary job losses

Question 3

What is frictional unemployment?

Answer 3

Workers move between jobs through career moves or geographical changes.
Only short term

Question 4

What is seasonal unemployment?

Answer 4

Unemployment at different times of year like at Christmas.

Mainly an occurrence in leisure, tourism and farming

Question 5

What is cyclical unemployment?

Answer 5

When there is a negative output gap and demand is low (demand deficient)

Question 6

What is real wage inflexibility?

Answer 6

Real wage above equilibrium wage rate means supply of labour is greater than the demand for labour so it is too costly for firms but in a free market real wages return to equilibrium

Question 7

How does net migration affect unemployment?

Answer 7

Increased net migration increases the supply of labour to the UK