Unemployment and its implications

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  1. Define what is meant by the term unemployment.                           (8)

Unemployment is when people who are registered as able, available and willing to work at the going wage rate in a suitable job but cannot find paid employment despite actively seeking work.  Unemployment falls when more people leave the jobless register, when they find work or leave the labour market, than sign on each month.

        Unemployment is generally measure in two separate methods.  The first one is the claimant count.  The claimant count measure of unemployment counts only those people who are eligible to claim the Job Seeker’s Allowance.  The Job Seeker’s Allowance was introduced in October 1996 replacing unemployment benefit.  Claimants who satisfy the criteria receive the Job Seeker’s Allowance for six months before moving onto special employment measures.

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        In April 1998, the government published an alternative measure of unemployment based on the Labour Force Survey.  This covers those who have looked for work in the past month and are able to start work in the next two weeks.

b) Explain the causes of unemployment.                                 (16)

        c) What are the Economic implications of unemployment on an economy?                                                                                   (16)


Unemployment is politically, socially and economically undesirable.  Unemployment is a waste of scarce resources leading to a loss in potential output of an economy.  Unemployment means ...

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