Week 08: Unemployment

Question 1

What are the different types of unemployment?

Answer 1

1. Frictional unemployment
2. Cyclical unemployment
3. Structural unemployment

Question 2

What is frictional unemployment?

Answer 2

It is temporary unemployment caused by the time required for workers to move from one job to another

Example: Fresh Graduates looking for a job and those re-entering the job markert

Question 3

What is cyclical Unemployment?

Cycle-> Business cycle-> What is one of the phases that causes lack of jobs

Answer 3

It is unemployment caused by a lack of jobs due to a recession in the enconomy.

Question 4

What is structural Unemployment?

Answer 4

Causeed by the mismatch of the skills of workers out of work and the skills rewuired for existing job opportunities.

Question 5

What are the four phases of a business cycle?

Answer 5

• Peak
• Recession
• Trough
• Recovery

Question 6

What is the definition of undermployed?

Answer 6

People who are working part-time who want to work full time or those working below their skill levels

Question 7

What is the definition of discouraged worker?

Answer 7

A person who wants to work, but has given up on finding a job, as they believe it is hopeless.

Question 8

What is the definition of a civillian labour force?

Answer 8

Pepole who are 16 years and older who are employed, or actively seeking a job.

This excludes memebers of the armed forces, homemakers and those in institutions (like: jail).

Question 9

What is the peak phase in a business cycle?

Answer 9

• When GPD reaches it’s maximum after recovery.
• Economy is close or at full employment

Question 10

What is the recession phase during a business cycle?

Answer 10

• A downturn in the business cycle. The real GPD declines, and unemployment rate rises.
• A recession is defined when the real GPD declines for more than 2 consecutive qauters.

Question 11

What is the trough phase in a business cycle?

Answer 11

When real GPD reaches it’s minimum after a recession.

Question 12

What is the recovery/expansion phase in a business cycle?

Answer 12

• An upturn in the business cycle, during which real GPD rises.
• Economy approaches full employment

Question 13

What are at least three factors that cause structureal unemployment?

Answer 13

• Lack of education
• Globlisation (outsourcing and offshoring)
• Advancement of technology
• Consumer demands

Question 14

How to calculate the rate of unemployment?

Answer 14

no.of ppl unemployed/labour forcex100%

Question 15

How to calculate labour force participation rate?

Answer 15

Labour force/working-age populationx100%