Unemployment

Question 1

Unemployment definition:

Answer 1

Those at the working age, willing and able to work, without a job (Note: working age is 16-65)

Question 2

Labour force definition:

Answer 2

Part of the pop. that is at the working age, willing and able to work, with or without a job

Question 3

Unemployment rate definition:

Answer 3

Percentage of the labour force that is without a job

Question 4

causes of unemployment (3)

Answer 4

• frictional
• structural
• cyclicial

Question 5

Frictional unemployment definition:

Answer 5

caused by temporary factors and lack of info between jobseekers and firms

Question 6

structural unemployment definition:

Answer 6

caused by labour lacking skills that are in demand

Question 7

cyclicial unemployment definition

Answer 7

caused by decrease in aggregate demand

Question 8

frictional unemployment subareas (3)

Answer 8

Search unemployment –> students who just graduated, looking for a job
Casual unemployment –> those who quit/lost their jobs and are in search of a new job
Seasonal unemployment

Question 9

structural unemployment subareas (3)

Answer 9

Industries and occupations that disappear –> other countries taking over the industry or become better at producing it
Regional unemployment –> high unemployment in rural areas
Technological unemployment –> employees redundant due to ICT (e.g. banking services offered through internet)

Question 10

effects of unemployment on economy (3)

Answer 10

Lower tax revenue
Govt. expenditure on welfare payments increases
Higher crime rates –> law enforcement costs