Unemployment

Question 0

workforce

Answer 0

• people of working age who want to be in paid unemployment

- incorporates people working and not working but want to work

Question 1

unemployment definition

Answer 1

people between the ages of 15-67 who wish to work but can not find suitable unemployment

Question 2

• unemployment rate

Answer 2

• number of people who want tonwork but are not working

- are in the workforce

Question 3

participation rate

Answer 3

• number of people in the workforce out of those of working age

Question 4

• full unemployment

Answer 4

• employable people who want to work have jobs

Question 5

• factors that affect participation rate

Answer 5

• increase in birthrates

- increase in motivation to work, therefore attracting workers

Question 6

• full employment

Answer 6

• does not mean 0% unemployment
• all employable people have jobs
• being employable has become harder as people expect workers to be better trained
• stil people that are unemployed due to disability and illness

Question 7

cyclical unemployment

Answer 7

• a macroeconomic phenomenon
• occurs when economy goes into a downturn / slowdown
• consumers reduce spending -> firms reduce output therefore less demand for labour
• government tries to counter this by increasing in expenditure when private sector fails

Question 8

structural unemployment

Answer 8

• due to changes in the nature and demand for labour, creates a disparity between the supply of labour and job vacancies
• the type of labour required by employers can change faster than the qualities and characteristics of the labour supply
• eg. Aus car manufacturing

Question 9

frictional unemployment

Answer 9

• unemployment when people choose to change jobs

- ie. leaving job to find another

Question 10

Effects of unemployment

Answer 10

• loss of output: economy produces less than it is capable of as it is not using all of its factors of production
• unemployment causes a waste of productive resources
• high unemployment increases the pressure on tr gov. budget
• unemployment reduces the total taxation that gov receives
• places a drain on government funds
• unemployment means less money for government to spend on other areas
• can cause substantial loss of income and output as all resources are not used
• results in lower level of A-consumption, aggregate investment and business confidence

Question 11

social effects of unemployment

Answer 11

• psychological effects on the person and their families
• increase crime rate
• increase suicide rate
• unemployment affects birth rate
• loss of social status
• loss of possessions
• loss of health
• poverty
• can cause individual loss of career progression and higher income opportunities
• decrease family stability

Question 12

ways to address unemployment

Answer 12

• expansionary fiscal policy
• expansionary monetary policies
• deregulation
• tax reform
• privatisation
• labour market reform
• tariff reduction
• training and education programmes for the unemployment

Question 13

other economic factors relating to improving employment

Answer 13

sound expansionary fiscal policies
- sound expansionary monetary policies
- sound microeconomic reform policies
- strong rate of economic growth
- higher household incomes
 modest wage increases
- low levels of inflation and low interest
- strong growth in goods sector