Causes & consequences of unemployment
- Created by: Jess
- Created on: 18-04-14 15:54
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Causes of unemployment:
- Cyclical unemployment: unemployment arising from a lack of AD (demand side unemployment)
- Structural unemployment: unemployment caused by the decline of certain industries and occupations due to changes in demand and supply
Forms of structural unemployment may be: regional unemployment; technological unemployment (advances in technology making people unemployed) or international unemployment (outsourcing)
- Frictional unemployment: short term unemployment occuring when workers are in-between jobs
Consequences of unemployment:
- Lost output: having people willing and able to work in unemployment is a waste of resouces. (economy producing inside its PPC)
- Lost tax revenue: if people were in work, incomes, spending, and possibly profits would be…
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