Employment/Unemployment

Question 1

Macro policy of full employment

Answer 1

People who are economically active in the work force and are willing to work are able to find employment

Question 2

Difficulties measuring unemployment using ILO

Answer 2

Statistical errors in sample

May be unemployed because they can’t find employment at their desired wage (doesn’t fit definition)

Question 3

Difficulties measuring unemployment using JSA

Answer 3

Some claim and aren’t prepared to work
Some aren’t eligible for benefits
Excludes those of government training courses

Question 4

Unemployment causes (types)

Answer 4

Structural (changing economy structure)
Cyclical (due to econ cycle/recessions)
Frictional (move between jobs)
Demand deficit (decreased AD)
Seasonal
Wage change (increased wage rate)
Voluntary

Question 5

Unemployment benefits

Answer 5

More time to look for jobs
Less pressure on wage increases
Easier for forms to recruit workers if they are expanding

Question 6

Unemployment costs to government

Answer 6

Lost output
Lost tax revenue
Increase G on benefits
Pressure on other forms of G

Question 7

Unemployment costs to unemployed

Answer 7

Health
Lack sense of purpose
Lost income
Poverty (effect children)

Question 8

Unemployment costs to other economies

Answer 8

Decrease X

Increased immigrating out

Question 9

Long term unemployment

Answer 9

Labour carrying effects (loss of work exp, loss of current/future income, changing pattern of jobs in economy)

Question 10

Full employment benefits

Answer 10

Maximise potential output
Decrease inequality (prevent relative poverty)
Improve business and consumer confidence
Unemployment causes poverty, stress and social problems
Decrease G

Question 11

Full employment costs

Answer 11

Labour shortages, wage inflation
Boom and bust econ cycle (unstable growth)
Struggle to fill unpoplular jobs