MACRO L4 - Unemployment

Question 1

define claimant unemployment

Answer 1

those in receipt of unemployment-related benefits

understates the level of unemployment as many people are ineligible for benefits

Question 2

define standardised unemployment

Answer 2

people of working age who are without work, available to start work within two weeks and actively seeking employment or waiting to take up an appointment

Question 3

what are some inflows of unemployment

Answer 3

FROM JOBS
- people made redundant
- people sacked
- people resigning

FROM OUTSIDE LABOUR FORCE
- School/college leavers
- people returning to labour force

Question 4

costs of unemployment to the unemployed and their family

Answer 4

• financial costs (earnings)
• personal costs (loss of self esteem, stress)
• scarring effect (the longer people remain unemployed, the more deskilled they become)

Question 5

costs of unemployment to society

Answer 5

• loss of output
• gov loses tax revenues
• firms lose profits

Question 6

most common types of unemployment

Answer 6

• real wage
• demand deficient (cyclical)
• frictional
• structural
• seasonal

Question 7

define real wage unemployment

Answer 7

Disequilibrium unemployment caused by real wages being driven up above the market-clearing level

Question 8

define demand deficient (cyclical) unemployment

Answer 8

Disequilibrium unemployment caused by a fall in aggregate demand with no corresponding fall in the real wage rate

Question 9

define frictional unemployment

Answer 9

Equilibrium unemployment that occurs as a result of imperfect information in the labour market

Question 10

define structural unemployment

Answer 10

Equilibrium unemployment that arises from changes in the pattern of demand or supply in the economy