Unemployment (Macro) Flashcards
Types of unemployment and issues surrounding each
Types of unemployment?
Structural, cyclical, frictional, seasonal
What is cyclical unemployment?
Unemployment as a result of low AD, people not needed to supply same quantity of goods.
Other name for cyclical unemployment?
Demand deficient unemployment or Keynesian.
What is frictional unemployment?
Unemployment resulting from people moving work
Other name for frictional unemployment?
Search unemployment
How many job vacancies in 2015 despite unemployment?
700,000
What is structural unemployment?
Unemployment from mismatches in demand and supply. People with wrong skills
What are reasons for structural unemployment?
-Technological advancements
-Outsourcing of work (UK to India or Apple to shenzen)
Is cyclical demand side or supply?
Demand side
Is structural and frictional supply or demand side?
Supply side.
What is the difference between voluntary and involuntary unemployment?
Voluntary is when there are jobs at the going wage rate but they refuse them. whilst involuntary is when the workers can’t find work at current wage market.
Who might be voluntarily unemployed?
Those receiving welfare benefits
What is real wage unemployment?
When high minimum wage leads to less demand at that wage.
What kind of unemployment is involved in the natural rate of unemployment?
Voluntary, frictional and structural
What is replacement ratio?
income out of work/income in work
What would rr value of close to 1 mean?
They earn nearly much or more out of work as they would in work.
How to reduce rr value?
lower benefits, increased min wage, lower taxes.
Factors of structural unemployment?
regional or occupational.
