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Unemployment - Coggle Diagram

- - - - Wastage of scarce resources, productive and allocative inefficiency
    - - Widen income ga between rich and poor, low wage workers have Structural UE
  - - - Waste of resources (PPC)
      - Unemployed workers have low confidence, esp when it is prolonged, drop out of labour force thus LRAS decreases
      - Uncertainty decreases confidence, C falls
    - - Little upward pressure on wages, deflation happens
    - - C falls, also affects M. X-M increases, improving BOT
  - - - Unemployed cannot buy G&S, material SOL falls
      - Employed cannot experience any wage increase due to lack of upward pressure on wages
      - Stress and worry causes fall in Non Material SOL
    - - Higher crime rates, vandalism, SOL affected
      - Country may end up adopting protectionist policies, cause retaliation from other countries, drop in trade, less quantity of G&S to choose from, fall in Non Material SOL
    - - Govt expenditure increases, fall in taxes
      - Cannot spend as much on other areas, affecting material and non material SOL
      - Budget deficit may end up with borrowing of money, debts for future generations
- - - - Imperfect Information
      - Personal Preference
  - - - Tech Advancements
      - Change in business costs
      - Permanent changes in the demand for G&S