Unemployment

Question 1

Feb 2008 (unemployment)

Answer 1

3.9% - lowest in 34 years due to sustained economic growth which helped reduce cyclical unemployment to NAIRU

Question 2

2008-2009 (GFC) (unemployment)

Answer 2

5.8% peak - economic slowdown reduced demand for labour, relatively low ue rate due to mining booms

Question 3

2010-2011 (unemployment)

Answer 3

4.9% - recovery from the GFC and mining booms created many new jobs, appreciating dollar however, made exports uncompetitive which kept the rate around 5%

Question 4

2013-2015 (unemployment)

Answer 4

6.1% - closure of the PMV industry lead to high structural unemployment

Question 5

2018 (unemployment)

Answer 5

5.5% - NDIS scheme surged full and part time jobs

Question 6

2020 (unemployment)

Answer 6

7.4% - closure of businesses due to lack of demand, consumption and investment

Question 7

Economic costs of unemployment (5)

Answer 7

1. Opportunity cost of lost output
2. Loss of human capital
3. Reduction in standard of living
4. Short-term decrease in economic growth
5. Increase in taxation burden

Question 8

Social costs of unemployment (2)

Answer 8

1. Increased income inequality

2. Worsening economic development

Question 9

effect of macro policy on ue

Answer 9

through increases in expenditure in the budget, there will be upward pressure on economic growth which will reduce unemployment, loosening of monetary policy will encourage consumption as a component of AD

Question 10

Labour market policies (3) (unemployment)

Answer 10

1. Increases to the minimum wage
2. Subsidies to firms
3. National infrastructure packages