Y11 Macroeconomics Topic 3 Unemployment

Question 1

Definition of Unemployment?

Answer 1

People who are not working who want a job but cannot find work

Question 2

How do you measure Unemployment?

Answer 2

Labour Force Survey organised by the International labour Organisation

Over 100,00 people in 40,000 households are surveyed every month.

Question 3

Problems with ILO survey?

Answer 3

International Comparisons are different because the way that unemployment is measured varied widely between countries

Question 4

Advantages of Labour Force Survey?

Answer 4

More People will admit to employment than claim benefits

Question 5

Advantages of Claimant Count?

Answer 5

Broad Measure

Easy and Quick to Measure

Question 6

Disadvantages of Labour Force Survey?

Answer 6

Only once every 3 months

Question 7

Disadvantages of Claimant Count?

Answer 7

Some can’t claim benefits (they have savings or a partner who earns money)

Some people won’t claim it (pride/ego)

Question 8

What is Claimant Count?

Answer 8

A way of measuring Unemployment

This is calculated using the number of UK workers claiming the Job seekers allowance

Always lower because people under 18 or over 65 can’t claim it

Question 9

What types of Unemployment are there?

Answer 9

Cyclical Unemployment
Seasonal Unemployment
Fricitional Unemployment
Structural Unemployment
Sectorial Unemployment
Technological Unemployment
Regional Unemployment
Voluntary Unemployment

Question 10

What is Cyclical Unemployment?

Answer 10

When Unemployment is caused by a recession

Falling demand for goods and services –> fall in derived demand for labour

Question 11

What is the solution to cyclical unemployment?

Answer 11

Government can increase spending pushing the AD back outwards

Question 12

What is Seasonal unemployment?

Answer 12

Demand for some professions will fluctuate according to the time of the year –> Unemployment during seasons where demand is low

Question 13

Solutions to Seasonal Unemploment?

Answer 13

Training Programmes so people can find work in the down season

Question 14

What is Frictional Unemployment?

Answer 14

When People are short term unemployed when moving between jobs or leaving education

Question 15

Solution to Fricitional unemployment?

Answer 15

Job centres and Websites which can provide information about jobs to unemployed

Question 16

What is Structural Unemployment?

Answer 16

Mismatch between the skill of workers and industry demands

Question 17

What are the three main types of Structural Unemployment?

Answer 17

Sectoral- When the economy moves from one sector to the next and some workers don’t have the skill for the new sectors

Technological Unemployment- New Technologies make Labour Redundant

Regional Unemployment - The industry a certain region is dependent on goes into deadline, leaving very high levels of local unemployment

Question 18

What is Geographical Immobillity?

Answer 18

Barriers restricting workers from moving to a different of work (Transport Costs)

Question 19

What is Occupational Immobillity?

Answer 19

Barriers restricting workers from changing profession (lack of skill due to lack of education)

Question 20

Solutions to Occupational Immboillity?

Answer 20

Get training

Question 21

Solutions to reduce Geographical immobillity?

Answer 21

Buy a car –> Reduces time taken to get there

Buy a house –> Ties someone to one location

Question 22

What is Voluntary Unemployment?

Answer 22

Unwilling to work at the current wage rate
Unwilling to retrain
Unable to work because of Geographical and Occupational Immobillity

Question 23

Solutions to voluntary Unemployment?

Answer 23

Raise Minimum Wage and lower job seekers allowance –> Encourages people to go to work

Retraining Schemes –> Give them loans to go to school

Only give people benefits who are applying for jobs

or using the free trading schemes

Question 24

Impacts of Uenmployment?

Answer 24

Lower Output
Wasteful Use of Scarce Resources
Increased Poverty
Increased Government Spending on benefits
Decreased Tax Revenue
Consumer Confidence falls
Business Confidence falls
Worsened Society