Low Unmeployment (3.2)

Question 1

What is employment

Answer 1

The use of labour in the economy to produce goods and services

Question 2

What is unemployment

Answer 2

Occurs when workers able and willing to work at the current wage rates are unable to find employment

Question 3

What is the claimant count method

Answer 3

The method of measuring unemployment according to the number of people who are claiming unemployment related benefits

Question 4

What is the rate of unemployment formula

Answer 4

Unemployment rate = (number of unemployed / workforce ) x 100

Question 5

What is frictional unemployment

Answer 5

Unemployment caused by time lags when workers move between jobs

Question 6

What is seasonal unemployment

Answer 6

Unemployment caused by a fall in demand during a particular season

Question 7

What is structural unemployment

Answer 7

Unemployment caused by a permanent decline of an industry or industries

Question 8

What is cyclical unemployment

Answer 8

Unemployment caused by a lack of demand in the economy

Question 9

What is cyclical unemployment also know as

Answer 9

Demand deficient unemployment

Question 10

What are the benefits of unemployment

Answer 10

• wage rates are kept down and therefore an advantage for firms as they are spending less
• firm’s costs are kept down so therefore become more competitive

Question 11

Costs of unemployment for individuals

Answer 11

• lower living standards
• excluded workers : when workers are unemployed for a long time they may never be able to find work
• cost to tax payers : as more must be spent on Jobseeker’s Allowance ect

Question 12

Cost of unemployment for government

Answer 12

• unemployment leads to more unemployment :recession

- a budget deficit : government spending exceeds tax income

Question 13

Cost of unemployment for regions

Answer 13

-may cause people to move away from that region causing more unemployment