AQA Economics Unit 2 Unemployment Revision

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Unemployment ­ AS Macro
Measures to reduce unemployment
Demand and Supply side causes
Unemployment can be measured in a two ways. The Claimant Count measure of
unemployment includes those unemployed people who are eligible to claim the
Job Seeker's Allowance. People who meet the criteria receive the JSA for six
months before moving onto special employment measures including the new
deal programme. The claimant count is the sum of all the people claiming
unemployment benefit.
The other way is the Labour Force Survey which covers 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 in the next two weeks.
The figure also includes those people who have found a job and are waiting to
start in the next two weeks. (Frictional Unemployment)
There are 5 different types of unemployment:
Cyclical (Demand Deficient)
Cyclical (Demand Deficient)
Demand deficient unemployment that occurs as a result of the economic
cycle and a lack of AD in the economy. Caused by a negative output gap.
Cyclical unemployment can be reduced by stimulating the economy and
trying to shift AD out through policies such as lowering interest rates,
lowering taxes or increasing government spending.
But cyclical unemployment can also be reduced through stimulating
SRAS with incentives such as tax breaks, low interest rates or helping
small businesses expand.
It can be caused by a shift in of AD or a shift in of SRAS.
And it can also be represented on a long run trend/boom graph.

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Structural Unemployment
Structural unemployment is associated with changes in the structure of
industry as some industries close down and the workers are then left
It can be caused by both technological changes and foreign competition
through globalisation.
Overcoming structural unemployment requires considerable occupational
retraining for the workforce, financial grants to try to attract foreign
industries to fill the gap left b domestic industries and/or assistance to
workers to move to area where jobs are available.…read more

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This also links to voluntary
unemployment as some people choose to become unemployed.
It is caused by the supply of labour not wanting to work at equilibrium
standards but can also be caused by poor workplace environments. It
isn't primarily a demand side issue.
It can also be caused by imperfect information which leads to workers not
finding the right jobs that they will accept.
Seasonal Unemployment
Seasonal unemployment is unemployment caused by the changing
demands of consumers in different periods of the year. E.g.…read more


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