Unemployment Chapter 29

Question 1

What is Unemployment?

Answer 1

Is when a worker is willing to work but is unable to find a job

Question 2

What are the difference types of Unemployment?

Answer 2

~ Cylinder unemployment
~ Structural unemployment
~ Real wage unemployment
~ Seasonal unemployment
~ Frictional unemployment

Question 3

What is Cyclical unemployment?

Answer 3

Is associated with trade cycle

Question 4

What is Structural unemployment?

Answer 4

Is when an industries close down and a new one opens up
Eg~ Sugar industry, Oil industry

Question 5

What is Frictional unemployment?

Answer 5

Is when a person switchs jobs
Eg~ a person who quits is job might be unemployed until he get another job

Question 6

What is Seasonal unemployment?

Answer 6

Is where unemployment arises due to seasonal demand in certain markets
Eg~ during Christmas Massy store will hire more worker but once Christmas end they will be fired

Question 7

What is Real wage unemployment?

Answer 7

Is where unemployment is caused by the wages being held above the market equilibrium level.

Question 8

What is the Formula for unemployment rate?

Answer 8

Number of unemployed ÷ labour force × 100

Question 9

What is the Formal for Labour Force?

Answer 9

Employed + Unemployed

Question 10

What is the Formal for Labour Force Participation Rate ?

Answer 10

Labour Force ÷ Population × 100

Question 11

What is the Formal for Natural Rate?

Answer 11

Frictional unemployment + Structural unemployment

Question 12

What are the cost of unemployment ?

Answer 12

~ Inefficiency
~ Increase in Crime
~ Increase in Poverty
~ Migration

Question 13

What is the Solution for Real Wage unemployment?

Answer 13

~ Firms given tax credits for training workers