Labour AoS 2

Question 1

NAIRU

Answer 1

Non-Accelerating Inflation rate of Union is the lowest rate of unemployment that does not add to inflationary pressures (including rising wages).

Question 2

Labour

Answer 2

The use of skills of different types of workers.

Question 3

Labour Market

Answer 3

An institution where buyers and sellers of labour resources negotiate a price that is called a wage.

Question 4

Disposable Income

Answer 4

Income available for spending after the receipt of welfare benefits and deduction of personal taxes.

Question 5

Transfer Income

Answer 5

Derived from government cash welfare payments or income support for the neediest individuals with little or no income or wealth.

Question 6

Unearned Income

Answer 6

Includes rent and interest, and is received for allowing others to use your property and savings

Question 7

Real Income

Answer 7

Equal to a person’s nominal level of income after taking into account the inflation or deflation rate.

Question 8

Earned Income

Answer 8

Comes from households selling their labour (i.e. supplying intellectual talents and/or physical power to businesses).

Question 9

Deregulation of the Labour Market

Answer 9

Means that there is less government interference in how wages are determined in the labour market, and more reliance on the conditions of demand and supply of labour and
the process of enterprise bargaining.

Question 10

Cyclical Unemployment

Answer 10

When individuals lose their job due to weak spending and a slowdown or recession.

Question 11

Structural Unemployment

Answer 11

Occurs when firms change their production methods and use new technology to become more efficient.

Question 12

Underemployment

Answer 12

When those aged 15 and over have a job and want to work more hours, but are unable to do so. They are not working to capacity.

Question 13

The underutilisation rate

Answer 13

The extent to which the available labour is not working at its capacity. This is equal to the unemployment rate plus the underemployment rate.

Question 14

Unemployed Persons

Answer 14

Those aged 15 and over who are actively looking for work but cannot find a job.

Question 15

Expansionary Aggregate Demand Policies

Answer 15

Involve budgetary measures by the government’s treasurer (e.g. lower taxes and increased government spending) and monetary measures by the Reserve Bank of Australia (e.g.
lower interest rates ) designed to boost spending or AD, in turn lifting economic activity and GDP, and reducing cyclical unemployment.

Question 16

he Fair Work Commission (FWC)

Answer 16

An independent government institution that manages industrial relations in Australia, monitors enterprise agreements and is responsible for setting the annual minimum legal award wage and conditions.

Question 17

Derived Demand

Answer 17

When a resource is only wanted when another good or service’s demand that uses that resource as an input for its production increases.

Question 18

Nominal Income

Answer 18

The amount recieved by an individual measured over a period of time.

Question 19

Discretionary Income

Answer 19

The amount of disposable income that is left over after households have paid that essential bills.

Question 20

Frictional Unemployment

Answer 20

When people are unemployed when finishing on job and starting another.

Question 21

Hard-core Unemployment

Answer 21

The outcome of personal attitudes that are seen by some as hostile to effective employment. (eg, having a disability, race, criminal record etc)

Question 22

Seasonal Unemployment

Answer 22

The termination of jobs due to regular change in seasons. (e.g can’t pick fruit when they aren’t ripe.)

Question 23

Hidden Unemployment

Answer 23

People who would like to work but who are discouraged from seeking jobs for various reasons, such as a repeated failure to find work.

Question 24

Disguised Unemployment

Answer 24

When individuals have jobs but are underemployed and not working to capacity, such as in part-time jobs with limited hours.

Question 25

Goal of Full Employment

Answer 25

A government target that represents the lowest rate of unemployment that will not cause inflation to accelerate (NAIRU). There will be no cyclical unemployment due to weak AD or recession. However, around 4.0–4.5 per cent of the labour force will be naturally unemployed due mostly to structural causes and other changes in supply-side conditions.

Question 26

Unemployment Rate

Answer 26

Number of people unemployed/Labour Force

Question 27

Employment Rate

Answer 27

People employed/Labour Force

Question 27

Participation Rate

Answer 27

People in labour force/People 15 or over

Question 28

Labour Force

Answer 28

Employed + Unemployed

Question 28

Non-Price Factors Affecting Demand of Labour

Answer 28

1. Demand for final Products
2. Business Confidence
3. Business Profitability
4. Efficiency of Labour
5. Government Budgetary Policy
6. More substitutes for Labour

Question 29

Non-Price Factors Affecting Supply of Labour

Answer 29

1. Population Size and Participation Rate
2. Net Immigration Rate
3. Work Life Balance
4. Restrictions on entry into occupations
5. Trade Unions
6. Government Budgetary Policy