econ unemployment

unemployment

The state of being eligible for work, actively looking for work, but without a job.

unemployment rate

The number of unemployed workers expressed as a percentage of the total workforce.

unemployment benefits

Payments, usually made by the government, to people who are unemployed (and actively seeking employment)

full employment level of output

The level of output that is produced by the economy when there is only natural unemployment.

hidden unemployment

Unemployment that is not included in official statistics because of such factors as exclusion of long time unemployed, part time workers, and over qualified workers.

fiscal policy

A demand-side policy using changes in government spending and/or direct taxation to achieve economic objectives relating to inflation and unemployment.

monetary policy

A demand-side policy using changes in the money supply or interest rates to achieve economic objectives relating to inflation and unemployment.

cyclical or demand deficient unemployment

Disequilibrium unemployment that exists when there is insufficient demand in the economy and wages do not fall to compensate for this.

natural or equilibrium unemployment

The level of unemployment that prevails in an economy that is producing at its full employment level of output. It includes frictional, seasonal and structural unemployment.

frictional unemployment

Equilibrium unemployment that exists when people have left a job and are in the process of searching for another job.

seasonal unemployment

Equilibrium unemployment that exists when people are out of work because their usual job is out of season, for example, a ski instructor in the summer.

structural unemployment

Equilibrium unemployment that exists when in the long-term the pattern of demand and production methods change and there is a permanent fall in the demand for a particular type of labour. There is a mismatch between skills and the jobs available.

budget deficit

A situation that exists when planned government spending exceeds planned government revenue. A government may "run a budget deficit" in order to increase aggregate demand in the economy.

automatic stabilizers

The features of government fiscal policy (for example, unemployment benefits and direct tax revenues) that automatically counter-balance fluctuations in economic activity. For example, government spending on unemployment benefits automatically rise and direct tax revenues automatically fall when economic activity is slow.

crowding out

A situation where the government spends more than it receives in revenue and needs to borrow money, forcing up interest rates and "crowding out" private investment and private consumption.