2.1.3 Employment and unemployment

• What does 'employment' refer to in economics?

  Being in work and paid
• 'Unemployment' refers to those willing and able to work but without a job
• The unemployment rate is a measure of the percentage of the labor force that is unemployed.
• What are the three main types of unemployment?

  Frictional, structural, cyclical
• Unemployment can have negative effects on individuals, businesses, and the economy
• Which policies are used by governments to reduce unemployment?

  Fiscal and monetary policies
• Evaluating the strengths and weaknesses of different policies is crucial for addressing unemployment effectively.
• Match the status with its definition and key characteristic:

  Employment ↔️ In work, receiving a wage/salary | Has a job

  Unemployment ↔️ Willing and able to work, actively seeking work | No job
• Order the key measures of employment and unemployment:

  1️⃣ Employment Rate

  2️⃣ Unemployment Rate

  3️⃣ Labor Force Participation Rate
• What is the unemployment rate if 1000 out of 5000 people in the labor force are unemployed?

  20%
• Frictional unemployment is always caused by economic downturns.

  False
• Match the type of unemployment with its definition, causes, and example:

  Frictional ↔️ Temporary unemployment due to job transitions | Job searches, new graduates | Recent college graduate looking for first job

  Structural ↔️ Mismatch between skills and jobs | Changes in technology or industry decline | Coal miners losing jobs

  Cyclical ↔️ Unemployment due to economic downturns | Business cycle recessions | Manufacturing workers laid off
• Manufacturing workers laid off during a recession are an example of cyclical unemployment
• What is the formula for calculating the employment rate?

  $\frac{\text{Number of Employed}}{\text{Working Age Population}} \times 100$
• The labor force participation rate includes both employed and unemployed individuals.
• The employment rate is calculated as the number of employed divided by the working-age population
• The unemployment rate measures the percentage of the labor force that is unemployed.
• The labor force participation rate is calculated as the total labor force divided by the working-age population
• What are the three main types of unemployment?

  Frictional, structural, cyclical
• Frictional unemployment is temporary unemployment due to job transitions
• Structural unemployment occurs due to a mismatch between skills and available jobs.
• Cyclical unemployment arises due to economic downturns
• During a recession, what type of unemployment might a construction worker experience?

  Cyclical unemployment
• Match the type of unemployment with its definition:

  Frictional ↔️ Temporary unemployment due to job transitions

  Structural ↔️ Mismatch between skills and available jobs

  Cyclical ↔️ Unemployment due to economic downturns
• What are the two main categories of causes of unemployment?

  Demand-side and supply-side
• Cyclical unemployment arises when aggregate demand falls
• Structural unemployment can be caused by changes in technology or industry decline.
• What is an example of frictional unemployment?

  A recent college graduate searching for a job
• Order the effects of unemployment on individuals, businesses, and the economy:

  1️⃣ Loss of income and increased stress for individuals

  2️⃣ Decreased consumer demand for businesses

  3️⃣ Lower GDP and increased welfare spending for the economy
• Unemployment refers to those who are willing and able to work but are currently without a job
• What is the key characteristic of someone considered employed?

  Has a job
• How is the employment rate calculated?

  $\frac{\text{Number of Employed}}{\text{Working Age Population}} \times 100$
• The unemployment rate is calculated as the number of unemployed divided by the total labor force
• What is the formula for the labor force participation rate?

  \frac{\text{Total Labor Force}}{\text{Working Age Population}} \times 100</latex>
• Match the measure with its definition:

  Employment Rate ↔️ Percentage of working-age population in employment

  Unemployment Rate ↔️ Percentage of labor force unemployed

  Labor Force Participation Rate ↔️ Percentage of working-age population in the labor force
• The employment rate is calculated as the number of employed divided by the working-age population
• How is the employment rate calculated?

  $\frac{\text{Number of Employed}}{\text{Working Age Population}} \times 100$
• The unemployment rate is calculated as the percentage of the labor force that is unemployed
• The labor force participation rate measures the percentage of the working-age population in the labor force.
• What does the employment rate measure?

  Working-age population in employment