Unemployment Revision Question and Answers - Economics

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ECON 4 - Unemployment Revision Questions

. What is the definition of unemployment?

Unemployment are those without a job but who are seeking work at current wage rates.

. How is unemployment measured in the UK?

Claimant Count

The Claimant Count measure includes people who are eligible to claim the Job Seeker’s Allowance (JSA). The data is seasonally adjusted to take into account predictable seasonal changes in the demand for labour.

Labour force Survey

The Labour Force Survey counts those who are without any kind of job including part time work but who have looked for work in the past month and are able to start work immediately. The figure includes those people who have found a job and are waiting to start in the next two weeks

. Explain the causes of cyclical unemployment and how it can be solved?
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Cyclical unemployment is involuntary unemployment due to a lack of aggregate demand for goods and services. This is also known as Keynesian unemployment. When there is a recession or a slowdown in growth, we see a rising unemployment because of businesses closing factories. It can be solved by the government by boosting ad – eg through expansionary fiscal policies that reduce tax and increase G spending.

. What is structural unemployment – give 3 causes and examples of each?

Structural unemployment occurs when people are made unemployed because of capital-labour substitution (which reduces the demand ...

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