Unemployment

Question 1

Define unemployment

Answer 1

The inability for a person who is actively seeking work to obtain employment

Question 2

How is unemployment measured?

Answer 2

Number of unemployed people as a percentage of the available labour force

Question 3

What is the current rate of unemployment? (May 2022)

Answer 3

At 4%, this is one of the lowest unemployment rates seen in a while.

Question 3

4 types of unemployment

Answer 3

Cyclical unemployment (caused by a drop in spending, decreasing demand and need for workers), structural unemployment (an external change which makes workers redundant such as increase in efficiency), seasonal unemployment (periods of unemployment seasonal, e.g. fruit pickers), frictional unemployment (unemployment between new jobs)

Question 4

Economic impacts of unemployment

Answer 4

Opportunity cost, lower living standards, decline in labour market skills, cost to the government, lower wage growth

Question 4

Social impacts of unemployment

Answer 4

Increased inequality, escalation of personal problems, poverty traps