What is the definition of unemployment in economics?
Willing and able to work, no job
Unemployment is a key economic indicator because high unemployment can signal economic recession or stagnation.
True
Unemployment occurs when a person is not currently employed but is actively searching for a job
What condition must a person meet to be considered unemployed?
Available to start working
Why is Jane considered unemployed in the example provided?
Company downsizing
Match the type of unemployment with its description:
Frictional Unemployment ↔️ Temporary unemployment due to workers moving between jobs
Structural Unemployment ↔️ Unemployment arising from a mismatch between job skills and available jobs
Cyclical Unemployment ↔️ Unemployment caused by fluctuations in the business cycle
What is a common cause of cyclical unemployment?
Economic downturns
Frictional and seasonal unemployment are considered less problematic than structural and cyclical unemployment.
True
In the example provided, the unemployment rate is approximately 7.69%.
True
Unemployment occurs when individuals who are willing and able to work do not have a job
Arrange the four types of unemployment from most temporary to most cyclical in nature:
1️⃣ Frictional
2️⃣ Seasonal
3️⃣ Structural
4️⃣ Cyclical
Seasonal unemployment affects industries like tourism and agriculture.
True
The definition of unemployment is: a person is not currently employed but is actively searching for a job
What is an example of frictional unemployment?
A graduate looking for a job
Match the type of unemployment with its example:
Cyclical Unemployment ↔️ Workers laid off due to decreased sales
Seasonal Unemployment ↔️ Ski resort workers laid off during the summer months
What are the four main types of unemployment?
Frictional, structural, cyclical, seasonal
Frictional and seasonal unemployment are generally considered less problematic because they are more temporary
Frictional unemployment occurs when workers are laid off due to decreased sales during a recession.
False
What does the unemployment rate measure?
Percentage of the labor force that is unemployed
The formula to calculate the unemployment rate is: Unemployment Rate = (Number of Unemployed / Labor Force) × 100
What is the negative impact of high unemployment on the economy?
Decreased consumer spending
An individual actively applying for jobs after being laid off is considered unemployed.
True
What causes structural unemployment?
Mismatch between job skills
Cyclical unemployment is caused by fluctuations in the business cycle
What is the formula for calculating the unemployment rate?
(Number of Unemployed / Labor Force) × 100
The unemployment rate is a key measure of economic health.
True
Match the policy approach with its description and example
Fiscal Policy ↔️ Government spending and taxation to influence aggregate demand ||| Increased spending on public works projects to create construction jobs
Monetary Policy ↔️ Central bank actions to adjust interest rates and money supply ||| Lowering interest rates to encourage business investment and consumer spending
Structural Policies ↔️ Policies to address skills mismatches and improve labor market flexibility ||| Investing in job training programs to upskill workers
The labor force is the sum of the number of employed and unemployed individuals.
Order the key effects of high unemployment on the economy
1️⃣ Decreased Consumer Spending
2️⃣ Reduced Aggregate Demand
3️⃣ Lower Business Investment
4️⃣ Economic Stagnation or Recession
Structural policies address the root causes of unemployment, particularly structural and frictional unemployment.