Unemployement, Gdp, & Taxation

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ASSIGNMENT 1. Define the different types of unemployment, its impacts on the economy and discuss what measures should the Government take to overcome such problems. Unemployment A situation where labour force participants are available and willing to work but are unable to find jobs. Therefore the unemployment rate is a percentage of the labour force who are unemployed and are actively seeking employment. Unemployment occurs when a person is available to work but currently without work. The prevalence of unemployment is usually measured using the unemployment rate, which is defined as the percentage of those in the labor force who are unemployed. Unemployment Rate= Number of Labour Unemployed x 100% Labour Force Types of unemployment • Frictional • Structural • Cyclical • Seasonal Frictional Frictional unemployment occurs when people are in between jobs, or are entering or reentering the labour force. This may even happen in full employment when people quit their jobs for a better position or higher wages or when fresh graduates are actively seeking for a job. A person who is searching for the right job after quitting or being laid off is considered to be part of frictional unemployment. The time period of shifting between two jobs is known as frictional unemployment and is a temporary condition. In many occupations, people changing jobs naturally must go through a period of unemployment between jobs, possibly because searching for a new job requires time. On average it will take everybody a reasonable period of time as they search for the right job. This creates unemployment while they look. The more efficiently the job market is matching people to jobs, the lower this form of unemployment will be. However, if there is imperfect

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