Class notes Economics Economics Key Ideas: SACE Stage 2: 4nd Edition, ISBN: 9781921548093

macro
objectives
4. I FULL EMPLOYMENT OF LABOUR


4. 2 PRICE STABILITY

4. 3 ECONOMIC GROWTH


4. 4 EXTERNAL BALANCE

, macroeconomic
objectives
4. l F U L L EMPLOYMENT OF LABOUR
I. employment
full 3. causes of unemployment




I
eco term full employment : is the lowest rate of ma l .




cyclical 1 general unemployment ( economic
downturn)

unemployment obtainable without accelerating inflation -


lack of demand for goods S services

A economic well-being
generates personal if firms governments S foreign buyers reduce
-




consumers
-
, ,




reduces household 's standard of livings individual's Hotan
unemployment
a
their demand for S services firms will
aggregate goods
.




self
.


esteem
Bo T A R G E T RATE respond by reducing production hence their demand for resources .




•
governments set targets this causes unemployment of labour resources .




for full employment is the lowest possible rate of unemployment
•


target -

unemployment due to lack of demand is referred as

rate
'

unemployment natural
'

lowest rate of attainable is known as
•




cyclical unemployment
.




of unemployment
frictional unemployment
.




Z '




•

full employment is defined as natural rate .
-
this term is used to explain people who are between
jobs

2- indicators of unemployment total no of
-
individuals in this category usually have already secured their
total no of
Labour workers in + next
TB THE LABOUR FORCE
=

force employment
workers
unemployed
jobs .




or
new entrants to the market ; school leavers
a
group of people available to work in
production of goods S services
labour
• -

.




CCOterm : the labour force consists of those over the age of 15 who are working in university graduates

paid employment for more than one hour per week or
actively seeking employment . -
individuals who are re -

entering the workforce after

PB TH E LABOUR FORCE PARTICIPATION RATE absence .




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•

Classification in the labour force -
examples
:
agricultural industries workers such as fruit pickers

and shears
working age population
.




government usually are not concerned with addressing this
type
individuals
-



i.
employed individuals 2. unemployed
of unemployment because it is temporary
(a) full time work
.




(a) actively seeking
(b) part time -
available to start work in reference week 4 . Structural unemployment

(b) usually happens when a firms restructure because
not actively seeking work -




reference week some labour work is not needed
-
not available to start work in

-
occurs when there is a mismatch between the skills of person
PB RELATIONSHIP BETWEEN THE PARTICIPATION A UNEMPLOYMENT RATES
for those skills in the location where individual
and the demand
is .




unemployment falls when the labour force participation rate rises
'

.




technical change improve labour productivity
when ECONOMIC activity starts to increase unemployment actually increases or to will create
-

the rate can
'


, ,




not decrease as fast as expected . as more people begin to actively seek work .


structural unemployment because only fewer workers are needed

This is because
jobseekers initially are unemployed -




to produce the same
output .




7W THE RATE OF UNEMPLOYMENT -
capital equipment
is
usually used to replace workers

in order to reduce production costs
eco erm the unemployed are those working less than one hour
per week
.


- :




known as structural
in paid employment actively seeking , work and ready to start .
-

unemployment created this
way is



'



formula for Total number of unemployment .




= unemployed
rate of -

× 100 example :
typist
unemployment
-




Labour force