Unemployment

Question 1

Measurements of unemployment

Answer 1

Claimant count

Labour Force Survey

Question 2

Claimant count

Answer 2

those who register as unemployed and are eligible for benefits

Question 3

Labour Force Survey

Answer 3

Which is now the more commonly accepted measure, where 41,000 people are asked if they are
without a job, want a job, have actively sought work in the last 4 weeks and are available to start work in the next 2 weeks or
out of work, have found a job and are waiting to start it in the next 2 weeks

Question 4

Unemployment

Answer 4

Unemployment causes a waste of scarce economic resources and reduces the long run growth potential of the economy.

Question 5

Seasonal unemployment

Answer 5

casual unemployment resulting from seasonal fluctuations in demand

Question 6

Frictional Unemployment

Answer 6

This is a form of voluntary unemployment also known as transitional unemployment, caused by people moving between jobs, or searching for jobs. E.g. School lealevers

Question 7

Structural Unemployment

Answer 7

unemployment due to a change in the pattern of demand and production

Question 8

Cyclical Unemployment

Answer 8

Unemployment due to a lack of AD

Question 9

Voluntary Unemployment

Answer 9

could get a job but prefer to wait, either to get a job which pays a higher wage, or one providing greater job satisfaction

Question 10

Involuntary

Answer 10

Would take any job if offered but worker is unable to find work

Question 11

Real Wage unemployment

Answer 11

is a form of dis-equilibrium unemployment that occurs when real wages for jobs are forced above the market clearing level

Question 12

Discouraged worker effect

Answer 12

means that someone has given up looking for a job because they believe there aren’t any jobs available

Question 13

Hidden Unemployment

Answer 13

this is when people do not have productive full-time employment, but are not counted in the official unemployment statistics : this may include people who are sick benefits, part time work, early retirement and redundancy

Question 14

Underemployment

Answer 14

is defined as a situation where people are working fewer hours than they wish ; underemployment may also refer to the fact workers accept jobs that dont utilise theirs skills

Question 15

disguised unemployment

Answer 15

when some of the long term unemployed give up the active searchfor work and leae the labour market, they are no longer counter in the unemployment statistics and become part of an army of discouraged workers creating a problem of hidden unemployment

Question 16

Unemployment trap

Answer 16

where the income tax system and benefit system reduces the net increase in come people can expect from taking paid work. Thus many people would not choose to take a job

Question 17

technological Unemployment

Answer 17

Unemployment due to the introduction of labour saving technology

Question 18

deindustrialisation

Answer 18

a fall in the proportion of national output accounted for by the manufacturing sector of the economy

Question 19

Natural Rate of unemployment

Answer 19

The unemployment that exists when aggregate demand for labour equals aggrgate supply, that is voluntary, frictional unemployment

Question 20

NAIRU (non accelerating inflation rate of unemployment)

Answer 20

that is the level of unemployment at which there is no tendency for inflation to accelerate

Question 21

adaptive Expectations

Answer 21

where decisions about the future are based upon past information

Question 22

Philipcs curve

Answer 22

economic model that shows the trade off betwene inflation and unemployment

Question 23

Stagflation

Answer 23

the coexistence of high levels of inflation and unemployment