701776
Description
Flashcards by jack.miers, updated more than 1 year ago
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Created by jack.miers
about 10 years ago
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| Question | Answer |
| Unemployment | Def: Those who are willing and able to work, but unable to find a job. |
| Method of measuring unemployment: | Labour force survey, 2.51million people approx. |
| Types of unemployment: | - Seasonal - Frictional - Structural - Cyclical - Real wage - Technical |
| Seasonal unemployment: | Tourism, farming, building- People unemployed when demand falls during seasons |
| Frictional unemployment: | Between jobs- e.g new graduates looking for work or leaving one job to get another. |
| Structural unemployment: | When whole industries collapse- e.g ship building industry in britain Etc. |
| Cyclical unemployment: | the Ups and downs of the economic cycle...--> HENCE CYCLICAL |
| Real wage unemployment: | Wage set above the equilibrium rate- e.g national minimum wage, or trade unions. |
| Technical unemployment: | When people are replaced by machines in order to increase efficiency. |
| policies to reduce unemployment: | --> The new deal was introduced in order to tackle frictional + structural unemployment. --> Increasing AD by lowering taxes and interest rates in order to tackle Cyclical unemployment. --> Increasing efficiency of job centres. --> Improve incentives for the unemployed to work ( lower income tax) --> encourage foreighn direct investment/ FDI in order to help tackle strucutural unemployment ( toyota investing in car industry) |
| Consequences of unemployment (BAD) | -->gov has to pay out benefits --> tax revenue overall is reduced --> gov not reciving tax income or NI contributions --> economy not working to its full potential --> higher crime, more mental health problems --> reduces both consumer and business confidence --> increase in income inequality |
| consequences of unemployment: (GOOD) | --> greater pool of resources to choose from --> lower inflation --> companies selling inferior goods, do well. |
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