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Economics IGCSEPDF 96
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Effective Definitions
Employment: Thenumber of people
working and contributing to the production
of goods and services.
Unemployment: The number of people
who are willing and able to work but are
currently without a job.
Unemployment Rate: The percentage of the
total labour force that is unemployed.
Notes: Types of Unemployment
●
Notes: Consequences of
Unemployment
●
Frictional Unemployment:
Costs to the Government: Lower
tax revenue
income/payingsales tax)and
higher
●
Short-term unemploymentthat
occurs when people are between
jobs (e.g., graduating, switching
careers). It is temporary and always
exists.
Structural Unemployment: Caused
by a mismatch between workers'
skills and the jobs available due to
●
●
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CoststotheIndividual:Loss of
income, reduced living standards,
stress, and loss of self-esteem.
(fewer peopleearning
long-term changes in the economy
(e.g., decline of a traditional industry
like coal mining).
Cyclical (Demand-Deficient)
Unemployment: Caused by a fall in
Aggregate Demand (AD) during an
economic recession or downturn. As
demand falls, firms reduce output
and lay off workers.
Seasonal Unemployment: Occurs
at specific times of the year due to
variations in demand (e.g., tourism,
agricultural harvesting).