government aims- unemployment

Question 1

what is the definition of unemployment

Answer 1

the under or non-use of a factor of production. not everyone without a job is unemployed. an unemployed person is one who is able and willing to work but cannot find a job

Question 2

what is the working population

Answer 2

all those self employed, in work, able to and seeking work. The unemployed are included in the working population.

Question 3

what is the dependant population

Answer 3

all those not in the working population.

Question 4

how are unemployment figures calculated

Answer 4

the labour force survey

the claimant count

Question 5

what is the labour force survey

Answer 5

The Labour Force Survey questions a large sample of households and uses this sample to work out the level of unemployment in the UK as a whole. The Labour Force Survey asks questions which seek to establish whether individuals without jobs are actively seeking work at present.

Question 6

what is the claimant count

Answer 6

The Claimant Count obtains the readily available figures for those claiming Job Seekers Allowance.The Claimant Count excludes those who are not claiming benefit, yet would take a job that suited them.

Question 7

why is the labour force survey better than the claimant count

Answer 7

It allows comparisons with other countries, such as European Union member states, because they also use this method.

Many people who seek work do not register for Job Seekers Allowance. It gives a substantially higher figure for unemployment than the Claimant Count method (see below).

Question 8

what are the causes of unemployment

Answer 8

cyclical unemployment
structural unemployment
frictional unemployment
seasonal unemployment

Question 9

what is cyclical unemployment

Answer 9

is associated with a general and significant fall in aggregate demand in an economy. The demand for labour is derived from the demand for what that labour produces. A fall in demand means that less employees and needed to satisfy this demand and firms respond by reducing their labour force.

Question 10

what is structural unemployment

Answer 10

is associated with a long-term decline in demand in a particular industry. For example a fall in demand for UK ships will mean unemployment in the UK shipbuilding industry.

Question 11

what are the causes of structural unemployment

Answer 11

New technology and more modern plant and machinery may mean that fewer workers will be required to produce the products. This is sometimes referred to as technological unemployment.

Falling demand in an industry because they are no longer required or consumers prefer the products of another country. The produce of other countries may be more price competitive or produced to a higher standard.

Question 12

what is frictional unemployment

Answer 12

is associated with barriers that prevent the unemployed smoothly filling available vacancies. An example of frictional unemployment would be the time it takes for a school leaver to match up with an appropriate job vacancy. This may be caused by:

a lack of knowledge about job opportunities

disincentives to work, i.e. welfare benefits that discourage seeking employment or a tax system that does not reward employment sufficiently enough.

Question 13

what is seasonal unemployment

Answer 13

is associated with industries where demand for labour changes at certain times of the year. Industries most affected are agriculture, tourism, retailing and construction.

Question 14

what are negative effects of rising unemployment on the individual

Answer 14

• Reduced income
• Reliance on state benefits
• Debt accruing due to major commitments, e.g. mortgage, loans
• Loss of relevant skills and motivation to work
• Reduced status in community and social exclusion due to low income
• Increased stress leading to health and relationship problems

Question 15

what are negative effects of rising unemployment on businesses

Answer 15

• Fall in demand for goods and services
• Fall in revenue
• Fall in profits
• Possible reduction in labour force

Question 16

what are positive effects of rising unemployment on businesses

Answer 16

• Bigger supply of available labour
• Less pressure to pay higher wages
• Less risk of industrial action

Question 17

what are negative effects of rising unemployment on the economy and government

Answer 17

• Loss of output and falling GDP
• Unemployment causing reduced demand leading to more unemployment
• Less money taken in income tax, VAT and corporation tax
• More government spending on benefits and training courses
• Less money available for education and other public services
• Increased crime and civil disorder more likely

Question 18

what is the definition of economic growth

Answer 18

Economic growth is defined as an increase in real national income. That means national income will have increased after the price rises due to inflation have been factored out of the figure. It can also be described as an increase in the output of goods and services by the UK economy.

Question 19

what is the impact of economic growth on the standards of living

Answer 19

Rising national income per head makes it probable that standards of living will improve. Crucially this depends on how the gain is distributed throughout the population, and on the balance of political power between the owners of capital and those who supply their labour.

Question 20

how can output be increased

Answer 20

new technology and the efficiencies it brings

net immigration (although the increase in output will now be shared among a greater population)

the discovery of new resources.