Unempliyment 3 Flashcards
1
Q
What’s the classical approach
A
Wages are too high
2
Q
What’s a Keynes approach
A
Lowering wages on lowers AD which will cause unemployment
3
Q
What causes structural unemployment
A
Tech advancements
Foreign competition
Decline of manufacturing
Occupational immobility
Geographical immobility
Long term regional decline
Poverty trap
Outsourcing production over Seas
4
Q
Determined of natural rate
A
Information available
Benefit level
Skills and education
Labour mobility
Labour marker flexibility
Structural changes
5
Q
What’s natural rate of unemployment
A
When the economy is working at full potential and has eliminated all cyclical unemployment
