Lesson 27-Unemployment

Question 1

Define Unemployment

Answer 1

Unemployment can be defined as a situation where a person is in the working age who is willing to work, looking for work and able to work but cannot find a job

Question 2

How is unemployment measured?

Answer 2

With the aid of the International Labor Organization measure

Question 3

What factors does the person have to have to be counted as unemplyed

Answer 3

If he has been out of work, actively looking for work in the last 2 weeks and willing to start a job in the next 4 weeks.

Question 4

What is demand deficient unemployment or cyclical unemployment?

Answer 4

Caused by a lack of aggregate demand in the economy of a country. Firms will not be encouraged to produce more thereby cutting down the number of employees causing unemployment. Cyclical unemployment is caused by a recession where the AD will fall.

Question 5

What is structural enemplyment?

Answer 5

When structural changes of an economy of a country causes unemployment.

Question 6

What are the types of structural unemployment and explain them?

Answer 6

1.Sectorial unemployment- Occurs when people are laid off because the industry has declined.
2. Technological unemployment- When a worker loses his job due to advancements in technology.
3. Regional Unemployment- This is when unemployment varies in different regions of a country or economy.

Question 7

What is seasonal uneployment?

Answer 7

Occurs when workers have employment only during certain months of the year.

Question 8

What is voluntary unemployment?

Answer 8

Refers to a situation when workers do not like to work

Question 9

What is frictional unemployment?

Answer 9

When a worker leaves his job and has to wait for some time until he finds a new one.

Question 10

State 5 impacts of unemployment

Answer 10

1. When people are unemployed the government will not be able to earn from tax revenue instead the government will have to spend on unemployment benefits and job seekers allowance, this will cause a deficit on the government budget.
2. Will be difficult for a country to achieve economic growth
3. It will increase suicides’, crimes and alcoholics
4. To finance unemployment benefits and job seekers allowance the government will raise taxes which will create a disincentive for people o work
5. The government will have no money to spend on other services