unit 2

Question 1

Unemployment

Answer 1

Unemployment is a situation where people who are willing and able to work are unable to find employment

Question 2

Measuring Unemployment

Answer 2

The Australian Bureau of Statistics uses Labor Force Surveys to measure the unemployment rate. The Labour Force Survey is selected from around the country.

Question 3

Employed

Answer 3

a person is classified as employed if they work more than one hour per week; and receive an income or profit (i.e not volunteer work); if they work in a family business; or if they have a job but cannot work due to illness, strikes or holidays during the survey week

Question 4

Unemployed

Answer 4

a person who does not have a paid job who is actively looking for work (completing job applications, registered with Centrelink) in the week prior to the survey.

Question 5

Non-Labour force

Answer 5

The Non-Labour force is made up of all those people who are over the age of 15, who are not working or not seeking work. For example students, retired people, some disabled people, volunteer workers and those who chose not to work such as parents who stay at home to raise children.

Question 6

Limitations of the unemployment rate

Answer 6

1. Unemployment rate ignores hidden unemployment
2. Unemployment rate ignores underemployment
3. Misleading survey answers

Question 7

Cyclical Unemployment

Answer 7

Cyclical unemployment occurs when economic spending falls, leading to reduced spending, production, and labor demand. Persistent pessimism can cause a recession, characterized by two consecutive negative economic growth quarters.

Question 8

Structural Unemployment

Answer 8

Structural unemployment arises from changes in production methods, technology, outsourcing, and higher wages, leading to a mismatch of skills and jobs, job losses, and increased unemployment due to technological advancements and business closures.

Question 9

Seasonal Unemployment

Answer 9

Seasonal unemployment results from the termination of jobs at the same time each year due to the regular change in seasons.
Common examples of these types of jobs include - fruit picking, tourism, working for holiday operators, sheep shearing and working in the ski fields.

Question 10

Frictional Unemployment

Answer 10

Frictional unemployment occurs when people are unemployed between finishing one job and starting another. This is common in the building trades and in some areas of rural industry.

Question 11

Long Term Unemployment

Answer 11

Long term unemployment refers to those people who have been unemployed for 52 consecutive weeks or longer - i.e 1 year or more

Question 12

Youth Unemployment

Answer 12

Around the world, young people (between 15 and 24 years of age) are more likely to be unemployed compared to the rest of the labour force. In Australia they are 2-2.5 times more likely to be unemployed compared with adults.

Question 13

Living Standards

Answer 13

Living standards refer to how well off or prosperous individual and the nation are overall. It includes both material well being and non material well being.

Question 14

Material Well Being

Answer 14

Material well being refers to the enjoyment received from access to goods and services. As output is increased, there are more goods and services available and therefore material living standards increase.

Question 15

Non Material Well being

Answer 15

Non material well being encompasses the quality of life beyond material possessions, encompassing human relationships, environmental conditions, crime rates, leisure time, education, and health.

Question 16

Effects of unemployment on individuals:

Answer 16

Reduced income
Family unhappiness
Lower self image
Less healthy

Question 17

Reduced income

Answer 17

unemployment benefits are generally lower than income and sometimes lifestyle changes need to occur because of this. Material living standards fall.

Question 18

Family unhappiness

Answer 18

family tension, stress and
violence can be increased when someone in the home
is unemployed. Non-material living standards fall.

Question 19

Lower self image

Answer 19

feelings of personal failure because
of loss of status and sometimes friends. Non-material living standards fall.

Question 20

Less healthy -

Answer 20

sometimes there can be higher incidence of health problems (nervous disorders, heart disease). Non-material living standards fall.

Question 21

Effects of unemployment on society:

Answer 21

Increased crime, vandalism, social unrest, unemployment, and family breakdown lead to lower material living standards, lower GDP, and a decrease in the production of goods and services.

Question 22

Effects of unemployment on government

Answer 22

The government faces a deficit due to reduced income tax revenue and increased unemployment benefits, resulting in higher outlays for health, law, order, labor market training, and job creation schemes, potentially leading to increased national debt.