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types of uneployment Flashcards

1
Q

how many types do you need to know

A

5

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2
Q

what are the 5 types of unemployment

A

seasonal
frictional
cyclical
strucural
realwage

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3
Q

what is cyclical unemploymeng

A

unemployment casued by insufficient AD in eocnomy

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4
Q

in terms of cyclical unemp a lack of ad in econ means

A

less d for firms to hire labour as derived demand for g/s

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5
Q

if rowht is low there is a lower demand for

A

labour

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6
Q

how do we show cyclical unemployment on a grpah

A

AD shifts left so level of growth from y1 - y2

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7
Q

if spending on output is low workers producing output are

A

no longer required and unemployment will rise

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8
Q

cyclical employment aka

A

demand deficient unemployment or keynesian unemployment

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9
Q

cyclical unemploymet closley linked to

A

negative ouput gaps

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10
Q

what does cyclical unmploymet being linked closely to -ve output gaps mean

A

if actual econ growth is below trend rate

the level of demand in the econ wont be high enough to ensure all workers looking for jobs can find employment

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11
Q

even if growth is positive but low what may rise

A

cylical unemployment

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12
Q

what is structural uneploymen t

A

results from mismatches between supply available and the labour demand for differently skilled labour

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13
Q

structural unemployment i due to long term chanfes in the

A

labour market

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14
Q

structural unemployment is due to long term changes in teh labour market which mean

A

certain industries declining whilst others growing

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15
Q

in terms of structural unemployment - workers vecoming unemployed from one industry may be unable to

A

switch to another industry due to not having adeqaute skills for new rising industries

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16
Q

what are the 3 things structural unemployment is associated with

A

occupational immobility

geographical immobility

long term trends in industyr growth and decline

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17
Q

what is occupational immobility

A

workers dont got skills or qualifications nwwsws meaninf they cant ransfer jobs or move on to a new profession and find work

cause skills they have not needed or they dont have the skilss - lost em or theyve become obsolete

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18
Q

what is geogrpahical immobility

A

when workers cannot or not willing to move

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19
Q

how can advances in tech cause structural unemployment

A

workers replaced by automated produciton

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20
Q

what is it called when advances in tech cause strucutral unemployment casue workers repaced by automated production

A

technological unemployment

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21
Q

what is regional unemployment and what is it linked to

A

people unwilling to move from one area to another

failure of regions to attract new businesses

linked to geographical immobility

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22
Q

structural unemployment can be affected by

A

globla factots

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23
Q

what are the global factors tructural unemployment can be affected by

A

emergini industrial naitons e.g china and india producec goods more cheaply than UK

so foreign goods more price comp

leads to declien in employment in UK manufacturing industries

likely wokers from these industries remain unemploeyd unless can fill vacanicies in other industries in whihc hte UK got comp advantage

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24
Q

what is fricitonal unemp

A

uneployment due to workers moving between jobs

timee takne to search fro new job = friciotnal unemp

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25
frictioanl unemp is usually what kind of term
short terms
26
frictional uneployment cna be longer if 3 marks
lack of info insuffficient retraining opportnties welfare benefits 'too generous' to prodive incentive to take jobs sooner
27
how do we reduces friciotnal unep
imporvemts in helping peopl find out locally and nationally what jbo vacacies exist create stronger incentives for peopel to accept avaialble jobs
28
ficitonal unemp aka
search unemployment
29
what is ral wage unemp
when wages are foxed above equilibrium wagge rate in labour mkt causing excess sipply of labour
30
in terms of real wage unemployment a hihg min wage may mean what
workers who are looking for jobs cannot find employment as ther is a lower quantity of labour demanded ag t hat wage
31
real wage unemploymet aka
classical unemployment
32
what graph do we draw to show real wage unemp
real wage - y axis quaniity of employment 0 x axis laobur supply labour demand w2 kine excess supply and demand highlighted byb real wage unemp
33
we can also say real wage unemploymenet occurs becasue
failure eof labour market to clear
34
what is seasonal unemployment
unemployment due to job depending on season e.g summetime fruit picker
35
what are the 2 ther types of unemployment
voluntary and involuntary unemployment
36
what is voluntary unemployment
people unwilling to acept job at going wage rate despite tehr being jobs avaiablr
37
what is involuntary unemployment
people are unable to find employment at the current market wage rare
38
in voluntary uneployment what unemployment may count in this category
friciotnal unemployment
39
why might fricitonal uneployment count in volunatry uneployment
if worker remians unemployed longer due to welfare benefits providing suppor but this could be seen as a subjective measure
40
what is the natural rate of unemplloyment
rate of unemployment that consists of all volunary, structural and frictional unemployment
41
when may natural rate of unemploymnt increase
if preplacemnt ratio tpp high
42
what is the replacement ratio
disposable income out of work/disposable income in work
43
a replacemtn ratio of close to 1 or above means
prspm cam earn in beenfits at least as much as hey could do in employment
44
a ratio of 1 reduce incentive to
work
45
reducing replacemtn ratio below 1 should reduce incentive to
reamin frictionally unemployrd
46
what are the 4 frictional (or voluntary factors that can reduce inventive to remain frictionally uneplotmed
- less gen beenfits for unemployed - slower minimum wage increases - introduction of tax credits - lower income tax or a higher tax free alownace
47
how can tax credits reduc eeinevtive to remain 'frictionally unemployed'
allows people in lower paid jobs to keep some of their beenfits
48
(structural factors) regional unempoyment exists when
unemployed people unwilling or possibly unableto move to where job vacanices are i.e eo imonoile
49
structural factors) what could regional unemp be due to
lack of knowledge of job vacies in otherr cities barreos to moving e..g high house prices move impractical due to famo ties
50
structural factros ) the harder it is to relocate
the higher the regional unemployment
51
strucutral factors ) unemployed worekrs may lack
appropritat eskills for jobs vancies that exist
52
structural factors - give xamples of unemployed woekrs lacking the appropriat eskills for vacancies that exost
deline of heavy industries e.g mininng created lareg number of unemploued who unable to simply move into jobs created in rising industrues such as ICT
53
structura factors) how cna we solve problems of workers lacking appropritate skills for job vacancies
better trainig of unemployed workers
54
the natural rate of unemploymetn exists even if
AD is hihg - cuclical unemployment largely eliminated
55
policies to reduce natural rate of unemp are connected with
reforms to supply side of the economy
56
unemploylemt can beb categoriesd according to whether caused by
demand side supply side factors
57
explain how unemployment can be caused by demand side factors
cycical unemp caused by demand side factors .e AD
58
Explai how unemployment can be caused bu supply side fcators
friciotnal and structural unemployment caused by productive potential of the econ connected with the econs log term aggregate supply therfore casued by SS factorf
59
in order to minimise uneployment its likely government swill use a
combo of policies relating to AD and AS
60
Full employment , natural rate of unemploymetn and wehere ther is no cyclical unemployment are used
interchangably
61
what i snother way of htinking of atural rat of unmep
unemployment exisitng when eoc on the LR AS currv or verticla portion of AS curve
62
if unemployment exist when econ on LR verticla portion of AS curve any attempt to reduce unemployment htrough demand side policies will
increase inflation
63
if unemploymen exists on vertical portion of keynesioan AS curve how can we reduce unemployment durther and safely
supply side policies
64
what are the 8 conseuences of unemp
risk of poverty for nem health issues (mentla and phsycial) for unep crime levesl may rise whn it rises (but link not always clear ) lower TR for gov due to fewer people working + decrease in speing increased gov spending on welfare benefits for unemployed deskilling of workforcce wasted resources less pressure on wages to rise - why?
65
explain how a consequence of unemployment os a deskilling of workfore
longer youre unemployed, harder it is to rejoin workforce - known as hysterisis
66
if resources are waasted in terms of unemp it means eocn cant operate on its
PPC
67
LESS PRESSURE ON WAGES TO RISE MEANS
POSSIBLY LOWERING COST PUSH INFLAITON
68
typical mistakes - full unemplyoment dont mean
0 unemployment
69
typical mistake - jiist bcuase unemployment exists what can't we assume and hwy
no jobs early 2020 800k jobs avaialbe
70
typical mistakes why cna imporvemtns in tech not be blamed for rises in unemployment
it destroys some jobs but creates more jobs than it destroys

Macro Economics (22 decks)

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