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Economic A Level > Unemployment > Flashcards

Unemployment Flashcards

1
Q

What is unemployment

A

If a person is out of work, is willing and able to work and is actively seeking work and can work in the next 2 weeks

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2
Q

What are the ways of measuring unemployment

A

The claimant count
The Labour Force Survey

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3
Q

Why does the government record unemployment

A

To know how much spare capacity there is in the economy
To plan the budget and the amount of transfer payments to the unemployed

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4
Q

How can unemployment be undermeasured

A

The LFS is a sample of households and there is always the possibility of sampling error

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5
Q

What is under employment

A

When people want to work full time jobs but only have a part time job
This is not counted in unemployment

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6
Q

What is the advantage of the LFS

A

It is internationally used and can be compared to other countries

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7
Q

How can unemployment be over measured

A

People who work for cash but say they are unemployed

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8
Q

What is economically inactive

A

When people are not working and not seeking work

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9
Q

what are the costs of unemployment

A

Individual
Economic
Fiscal
Social

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10
Q

What is the individual cost of unemployment

A

Loss of income
Fall in living standards
Loss of self-esteem

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11
Q

What is the economic cost of unemployment

A

Productively inefficient economy
Opportunity cost

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12
Q

What is the fiscal cost of unemployment

A

Cost of transfer payments
Loss in tax revenue
Budget deficit

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13
Q

What is the social cost

A

social deprivation
Worsening health
Lower life expectancy

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14
Q

What is long term unemployment

A

Unemployed over 1 year

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15
Q

What are NEETs

A

16-24 year olds who are not employed, in education or training

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16
Q

What are the benefits to unemployment

A

Individual
Firm
Economy

17
Q

What is the individual benefit of unemployment

A

People can change career and do new training

18
Q

What are the benefits to a firm of unemployment

A

Cheaper and easier to find labour
Workers are more likely to work harder if they can be replaced easier

19
Q

What are the benefits to the economy of unemployment

A

Can keep down demand pull ad cost push inflation

20
Q

What are the types of unemployment

A

Cyclical
Structural
Seasonal
Frictional
Real wage

21
Q

What is cyclical unemployment

A

It is unemployment caused by the trade cycle and lack of AD and lack of derived demand for labour
Known as the demand deficient or Keynesian unemployment

22
Q

What is structural unemployment

A

It is unemployment that occurs when economies change their basic composition over time. Linked to what, how and where stuff is produced.

23
Q

What recurring features does structural unemployment have

A

Regional unemployment - industries focused in certain areas
Technological unemployment - replaced by machines
Unemployment made worse by immobility of labour

24
Q

What is geographical immobility

A

When a person is unwilling and unable to move to a different part of the country to take up new work

25
Q

What is seasonal unemployment

A

Unemployment caused by changes in seasons that result in an impact on employment in seasonally affected industries

26
Q

What is frictional unemployment

A

A form of short term, transitional unemployment due to workers moving between jobs

27
Q

What makes frictional unemployment worse

A

Imperfect information about job vacancies
Disincentives from taxes and benefits system

28
Q

What is real wage unemployment

A

It is the surplus of labour that exists in a market due to sticky wages that have not been adjusted following a change in demand or supply of labour

29
Q

What causes sticky wages

A

Trade unions
State imposed minimum wages
Powerful employers who want to keep the employees motivated

30
Q

What is the cure to cyclical unemployment

A

Boost AD
Cut in T
Increase G
Cut Interest rates
Increase money supply
Depreciate exchange rate

31
Q

What is the cure for structural unemployment

A

Regional policy of moving jobs to low unemployment areas
Incentives to firms who set up in these areas
Subsidised housing
Retraining schemes if there is a lack of skills

32
Q

How to cure frictional unemployment

A

Cut income tax
raise min wage
cut transfer payments
Remove information failure by creating systems that connect the unemployed and employers

33
Q

How to cure real wage unemployment

A

Legilsation to weaken the power of workers
Weaken the dominace of large firms

Economic A Level (22 decks)

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