Pos and Negs Of UEMP

Question 1

Positives of Frictional Unemployment(Positives of unemployment)

Answer 1

The constant flow of people into and out of the workforce (frictional unemployment) provides individuals with improved pay and conditions & better opportunities.

Question 2

Positives of Structural Unemployment(positives of unemployment)

Answer 2

A structural change (structural unemployment) is an incentive for individuals to improve their performance and acquire new skills & knowledge.

Question 3

Direct costs of the GDP gap

Answer 3

Lost income for housholds

Lost tax revenue for government

Cost of unemployment benefits

Question 4

Indirect cots of the GDP gap

Answer 4

The opportunities/benefits that could have been obtained with these payments if they were spent instead on infrastructure, health or education

Question 5

Negative effects of unemployment

Answer 5

• Long-lasting effects on those with low levels of education qualifications/skills or those who can’t adapt to changing environments of workforce. Which turns into long-term unemployment (1 year). That could result in them turning into discouraged workers & giving up.
• Lower standard of living due to lower disposable income
• Lower spending flows which reduces business revenues