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Chapter 9: Unemployment (causes (structural unemployment (change in…
Chapter 9: Unemployment
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number of people of the legal working age who are willing and able to work but are unable to find suitable employment
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causes
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real wage unemployment
when real wages are forced above market clearing level and there is surplus of labour
consequences
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social
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increase in crime, divorce rates
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policies
frictional unemployment
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improvement in industrial relations (ie. improved organisational ability of management) to reduce bottlenecks and breakdowns
structural unemployment
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grants and incentives (raises costs, hastening decline of industry threatened by competitors; industry becomes a burden to govt; policies not beneficial in long term)
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seasonal unemployment
work-sharing programmes (may result in disguised unemployment where workers are working below productive capacity
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