Unemployment/Employment

Question 1

Unemployment definition

Answer 1

Those willing and able to work, who are seeking work, but don’t have a job

Question 2

Difference between voluntary and involuntary unemployment(not types of unemployment btw just features)

Answer 2

Voluntary-able to work, but aren’t willing to work(option to work)

Involuntary- able and willing to work,but dont get work(no option)

Question 3

What is Disequilbrium uneployment(btw its not one of the 4 types)

Answer 3

Occurs when AD for Labour is less than the AS of labour(labour market is Disequilibrium)

Basically:
firms Demand for workers is less the amount of workers who need a job

Question 4

When does equilibrium unemployment occur

Answer 4

When the labour market is equilibrium (AD for labour=AS for labour)

Question 5

The 2 types of unemployment that are disequiblium unemployment

Answer 5

1)Cyclical unemployment
2)Real wage Unemployment

Question 6

The 3 types of unemployment that are Equilibrium unemployment

Answer 6

1)Frinctional
2)Seasonal
3) structural

Question 7

When does it occur(Cyclical unemployment)

Answer 7

In a recession (when theres a lack of AD)

Question 8

What graph shows it (Cyclical unemployment)

Answer 8

AD/AS. - ad shift left

Question 9

Chain of reasoning(cyclical unemployment)

Answer 9

1)in a recession, AD is low/decreses
2)due to any of the components of AD decreasing
3)Firms are selling less/decrease in profit
4)To maintain profit margins they decrease labour force
5)this Increases unemployment

Question 10

Explaination of cyclical unemployment
On a graph

Answer 10

1)theres a recession
2)so:demand for labour decreases
3)AD shifts left
4)now theres excess supply
5)As thee is excess supply-demand for labour decreases

Question 11

Recession meaning

Answer 11

Decline in economic growth(Real GDP)

Question 12

Meaning/occurs when (Real wage unemployment)

Answer 12

Occurs when **wages are set above equilibrium **
Causing excess supply of labour

Question 13

What type of graph (Real wage unemployment)

Answer 13

Demand/supply graph( drawn the same as AD/AS)

Wages(y axis)
Quantity of workers(x axis)

Question 14

HOW IT MAY OCCUR (Real wage unemployment)

Answer 14

Wages can be set/pushed above equilibrium when:

1)Government set Minimium wages
2)Trade unions push wages up

Question 15

How to draw wages being pushed above equilibrium on graph

Answer 15

1)Increase wage then go through both the demand/supply lines then down on both:

2)Should have Q, Qd and Qs(on x-axis)
Just wage and wage1

It should display excess supply- the supply on the far right and demand on the far left

Question 16

How is equilibrium unemployment and natural rate of unemployment the same thing

Answer 16

even though the labour supply is equal to the labour demand(equilibrium) there is still going to be unemployment- The natural rate of unemployment

Question 17

The 3 types of unemployment within the Natural rate of unemployment/at Equlibrium

Answer 17

1)Frictional
2)structural
3)Sesonal

Question 18

What is Frinctional unemployment

Answer 18

Workers move from 1 job to another
In **hopes of finding there perfect job88

Question 19

What is seasonal unemployment

Answer 19

Temporary decrease or increase in labour demand
Between seasons

Question 20

Structural unemployment meaning (the most important unemployment at equilibrium)

Answer 20

Immobailty of labour
due to long-term change in an industry
For example:AI replacing car builders

Question 21

The 2 types of Immobility of labour/why it causes people to stay unemployed for a long time

Answer 21

1)Occuptional-cant get a job because u lack the skill setto work in a different industry

2)Geographical-cant get a job,because of your Location

Question 22

Reasons for immobility of Labour(long-lasting unemployment)

Answer 22

1)TECHNOLOGY ADVANCEMENTS
E.G-mass replaces workers in the manufacturing industry

2)Industry loses their Competitive advancements

Question 23

An example of technology advancements causing Immobality of labour

Answer 23

Occupational- an ex-car builder who is willing to work, but can’t find a job as the car industry now uses Robert’s to manufacture(Tech advancements)

Question 24

Immobility of labour meaning

Answer 24

Remaining unemployed for a long time

Question 25

What causes Cyclical unemployment/Demand deficiency unemployment (same thing)

Answer 25

Lack of aggregate demand, which occurs in recessions

Question 26

A change from abroad that increases unemployment

Answer 26

Globalisationcontributes to structural unemployment

1)when production moves abroad, due to lower labour costs

2)skilled workers from theses industries will struggle to find work(occupational immoablity)
Due to:the industrys decreasing in size

Question 27

Where should maximum prices be set

Answer 27

Set below equilibrium