Inflation and Employment Flashcards
What is inflation?
The increase in the overall level of prices in an economy
What is deflation?
Negative inflation
Why is deflation bad?
Sign that the economy is in terminal decline
People expect prices to fall and postpone purchases - reduces demand and worsens the recession
What is disinflation?
Rate of inflation decreases but isn’t negative
What is classified as “in employment”?
Employed by firms/organisations or self-employed
What is classified as economically inactive?
All people in the age range that aren’t active in the work force (students, retired, sick)
What are the 2 ways of measuring unemployment?
Jobseeker’s Allowance USA
ILO unemployment rate
What is the criteria needed to be under the Jobseeker’s Allowance USA?
You must be:
Out of work
Capable/available/actively seeking work during the week you make the claim
What are the disadvantages of the Jobseeker’s Allowance USA?
People can claim it without wanting to find work
Excludes some people who want to work but can’t get the benefit - women after childbirth
What is the claimant count of unemployment?
The Jobseeker’s Allowance USA
What is the ILO unemployment rate?
A measure based of the Labour Force Survey for the unemployed
What is the ILO unemployment rate?
A measure based of the Labour Force Survey for the unenmployed
What does the ILO unemployment rate classify as unemployed?
The unemployed are people who are:
Without and want a Job
Sought work in the last 4 weeks and can start in the next 2
Or:
Out of work and found a job
Can start in the next 2 weeks
Which the the better measure of unemployment?
The ILO unemployment rate as the claimant count is unreliable (only captures people who are eligible for Jobseeker’s Allowance)
What are the disadvantages with the ILO employment data?
Based on sample evidence and extrapolated for the uk - not guaranteed to be fully representative
Doesn’t cover people who can’t find a job at their desired wage
