4.2.3 Consequences of Unemployment

• The economically active population includes both employed and unemployed individuals.


  True
• Structural unemployment occurs due to skills mismatch, technological changes, or geographical location
• Reduced national income occurs because fewer workers produce goods and services
• Unemployment can lead to stress, anxiety, and depression.


  True
• What are the political consequences of unemployment?

  Political instability, policy changes
• Populism and extremism can undermine democratic institutions
• Unemployed individuals may be drawn to populist or extremist political movements promising quick solutions
• What does 'economically active population' include?

  Employed and unemployed
• Cyclical unemployment occurs during economic downturns.


  True
• Unemployment leads to a decrease in GDP
• Arrange the economic consequences of unemployment in order of their impact:

  1️⃣ Reduced National Income

  2️⃣ Decreased Tax Revenue

  3️⃣ Increased Welfare Costs

  4️⃣ Lower Consumer Spending
• Reduced business investment slows long-term economic growth.


  True
• Job loss and financial insecurity can cause high levels of stress, anxiety, and depression
• Arrange the social consequences of unemployment in order of their impact:

  1️⃣ Increased Poverty

  2️⃣ Mental Health Issues

  3️⃣ Increased Crime

  4️⃣ Social Inequality
• High unemployment can lead to social unrest, protests, and even political upheaval
• What was the impact of high unemployment during the 2008 financial crisis?

  Increased poverty
• Unemployment refers to the state of individuals who are willing and able to work but cannot find employment
• What are the four main types of unemployment?

  Structural, frictional, cyclical, seasonal
• What are the economic consequences of unemployment?

  Reduced GDP, tax revenue
• Lower business confidence can lead to reduced investment during unemployment.


  True
• What are the social consequences of unemployment?

  Increased poverty, mental health issues
• Increased poverty due to unemployment reduces income and leads to dependence on welfare
• Unemployed individuals may be drawn to populist or extremist political movements.


  True
• What is one political consequence of high unemployment?

  Political instability
• Governments may address unemployment by increasing spending on job training programs.


  True
• The unemployment rate is calculated as the number of unemployed individuals as a percentage of the total economically active population
• Match the type of unemployment with its cause:

  Structural ↔️ Technological changes

  Frictional ↔️ Job transition

  Cyclical ↔️ Economic downturn

  Seasonal ↔️ Seasonal demand
• What is an example of structural unemployment?

  Factory workers replaced by automation
• Why does unemployment decrease tax revenue?

  Fewer people employed
• Unemployed individuals have less disposable income
• What is one social consequence of unemployment?

  Increased poverty
• Desperation from unemployment can drive some individuals to engage in illegal activities.


  True
• What is the impact of increased poverty due to unemployment?

  Unmet basic needs
• Populist movements may attract unemployed individuals with promises of quick solutions.


  True
• The Rust Belt transition highlighted the need for retraining programs to address structural unemployment.