Notesale: Turn your study into money

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Unemployment= those who are of working age, who are without work, but who are available
for work at current wage rates (in relation to number unemployed)
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Measures of unemployment;
Claimant; those in receipt of unemployment related benefits
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These figures are compiled from the national labour force surveys
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The tougher the benefit regulations, the
lower the claimant rate
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G
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49 million (7
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63 million (5%)
Disequilibrium unemployment= unemployment resulting from real wages in the economy
being above the equilibrium level
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Types of disequilibrium unemployment;
Real wage unemployment; where trade unions use their monopoly power to drive wages
above the market clearing level
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Unions have some power in some industries to drive up wages,
power has waned over years though
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Globalisation has meant that many firms face intense competition from rival countries, so
many firms refuse to allow large wage increases as they can simply use cheaper labour
abroad
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Is caused
by a fall in aggregate demand with no corresponding fall in the real wage rate
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They will be
prepared to build up stock but over time may reduce capacity and labour force
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As economy grows= demand deficient unemployment falls
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Growth in the labour supply; if labour supply rises with no corresponding increase in the
demand for labour, the equilibrium real wage rate will fall
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NOT AS SERIOUS AS DEMAND DEFICIENT UNEMP GENERALLY as supply of
labour changes relatively slowly
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They may not get the first job they apply for or not choose the first job they are offered, the
employer may also continue searching
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Structural Unemployment; is where the structure of the economy changes
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This may
be due to changing consumer tastes, changes in trends or competition from other industries
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g
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-a change in the methods of production= technological unemployment (same level of output
with fewer workers due to better production techniques
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g
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It often occurs in particular regions (regional unemployment), more likely to occur in
industries concentrated in specific areas
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g
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Seasonal unemployment; demand for labour fluctuates throughout the year
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g

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