Unemployment Flashcards

1
Q

Working age population?

A

16-64

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2
Q

What’s is the active population

A

People of working age who are able to work and actively seeking work or actively working

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3
Q

What is inactive population

A

People of working age who aren’t able to work / not actively seeking work

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4
Q

Define unemployment

A

When someone is able to work and is actively seeking work but not working

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5
Q

How do you calculate unemployment rate

A

Unemployment level/active population X 100

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6
Q

What is the unemployment level

A

The number of people who are unemployed

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7
Q

How do you calculate the activity / participation rate

A

Active population / working age population X 100

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8
Q

How do you calculate employment rate

A

Employment level/ working age population X 100

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9
Q
A
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10
Q
A
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11
Q

Why might unemployment rate fall

A

A decrease in the number of unemployed people or an increase in the economically active population

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12
Q

How could unemployment level increase without affecting the employment level

A

If there was an increase in immigration

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13
Q

Why might unemployment rate fall

A

A decrease in the number of unemployed people or an increase in the economically active population

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14
Q

Why is the ILO limited

A

Only serves 80000 households out of 27 million so does not give an accurate estimate of unemployment across the uk

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15
Q

Why is the claimant count limited

A

Not everyone who is unemployed will claim benefits
Will underestimate unemployment

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16
Q

How is real wage unemployment shown on a labour market diagram

A

Wages are above the equilibrium creating excess supply of labour

17
Q

What is real wage / classical unemployment

A

When the wage is above equilibrium wage which creates excess supply of labour = Unemployment

18
Q

Why would wages stay abouve equilibrium price and not decrease

A

The govt made it illegal to pay workers the equilibrium price
National minimum wage

19
Q

What else may push wages above the equilibrium

A

Trade unions

20
Q

What is demand deficient / cyclical unemployment

A

When there is not enough demand in the economy causing firms to reduce their demand for labour firing workers creating unemployment

21
Q

When does structural unemployment occur

A

When the structure of the economy changes and jobs shift from pre sector to another

22
Q

2 reasons for structural unemployment

A

Occupational immobility
Geographical immobility

23
Q

What is occupational immobility

A

When workers cant move between different jobs because they lack the skills needed

24
Q

What does occupational immobility lead to

A

Structural unemployment because the economy has changed structure

25
How can the government intervene to help with structural unemployment
Education Training Apprenticeships
26
What is occupational immobility
When workers cant move between different jobs because they lack skills needed
27
What is geographical immobility
When workers struggle to move location to fill new jobs
28
How can governments reduce geographical immobility
Using employment subsidies or transport improvements
29
How is cyclical unemplyment shown on an ad-as diagram
Left shift in aggregate demand
30
What is frictional unemployment
Temporal unemployment whilst job searching
31
What is seasonal unemployment
When people are unemployed due to seasonal changes
32
33
What is hysterisis
When a recession causes long-lasting effects which persist after the economy comes out of recession
34