Unemployment Flashcards
What is the working age range
16-64
Working age population can be broken down in to two groups:
Active and inactive population
What is active population
People of working age who are able to work and actively seeking work or actively working already
What is inactive population
People of working age but unable to work and aren’t actively seeking work
What is unemployment level
Number of people unemployed
What is unemployment rate
Percentage of people unemployed
What are the 5 types of unemployment
Real wage or classical unemployment
Structural unemployment
Cyclical and demand deficient unemployment
Frictional unemployment
Seasonal unemployment
What is real wage/ classical unemployment?
When the wage is above the equilibrium wage creating an excess supply of labour. This can be shown using the labour market diagram
What is demand deficient /cyclical unemployment
Demand is deficient( not enough demand for goods and services in the economy. No one wants to buy anything so firms produce less leading to a decrease in derived demand for labour so firms fire workers
What is structural unemployment
When the structure of the economy changes, shifting jobs from one sector to another sector
What causes structural une
Occupational and geographical immobility
What is frictional unemployment
When you are temporarily unemployed whilst looking for a job
What is Seasonal unemployment
When people find themselves unemployed during certain seasons because their job is seosonal
What are the 7 macroeconomic objectives
2%+- 1% inflation rate
Economic growth
Reduce unemployment
Current account equilibrium
Balanced budget
Reduce inequality
Environmental sustainability
