Topics: Monetary policy, Economics, Unemployment Pages: 2 (469 words) Published: June 12, 2015
a) Labor force is defined as people from the total population between the age of 16 & 64 who are not in institutions and who are either employed or unemployed but seeking work. Those who are not in labor force are either in institutions or are voluntarily unemployed. Unemployment is made up of people who are currently not working but are looking for a job.

b) Structural unemployment
The portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries. It is long-term, or possibly permanent, unemployment resulting from the non-existence of jobs for unemployed workers. These unemployed workers require additional education and retraining. Frictional unemployment

unemployment caused by the normal search time required by workers with marketable skills who are changing jobs, initially entering the labor force, re-entering the labor force or seasonally unemployed the cause of this unemployment:

either the transition time to a new job, or
lack of information required to match a job application immediately with a job vacancy.

c) Employment tends to fall when aggregate output falls and rises when aggregate output rises. The reason employment falls when the econ experiences a downturn is that firms cut back on production coz they need fewer workers than before, so people get laid off.

For individuals: Financial hardship and emotional suffering The loss of self-esteem and the feeling of inadequacy that affect the unemployed can lead to depression, frustration, increased domestic violence and suicide. Those who are still employed may fear being the next to be retrenched and this may put them under stress and may affect job performance.

For economy: low production and income, slow growth and high poverty The loss of production that results from unused resources.
A serious unemployment problem means economy is declining. This means low output level...
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