Humanities Economics

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Economy

A system for producing, distributing, and consuming goods and services.

Household Sector

Consumers in the economy; they purchase goods and services.

Business Sector

Producers in the economy; they create goods and services for consumption.

Frictional unemployment

Temporary unemployment for those entering the job market or switching jobs.

Structural unemployment

Unemployment due to a mismatch between workers' skills and job availability, often from technological changes.

Cyclical unemployment

Unemployment caused by a downturn in the overall economy or business cycle.

Seasonal unemployment

Unemployment that occurs due to predictable seasonal patterns of work.

Hidden unemployment

Workers who are underemployed (overqualified or part-time but desire full-time) or discouraged workers who have stopped looking for work.

Opportunity cost

The value of the next best alternative that was not chosen when a decision was made.

Economic Interdependence between Countries

Countries rely on each other through trade for imported goods, economic growth, and improved living standards.

Unemployment Rate Calculation

(\frac{\text{Number of Unemployed}}{\text{Labor Force}}) \times 100\%. For example, (5000 \div 10000) \times 100 = 50\%

Reasons for International Trade

To achieve economic advancement, access a wider variety of imported goods, and satisfy consumer demand.

Impact of Unemployment on Economy

Leads to decreased consumer confidence, reduced spending, lower production, and increased government welfare spending.

Globalisation

The increasing economic integration and interdependence of countries through the movement of goods, services, capital, technology, and ideas.

Disadvantages of Globalisation

Can include unemployment from outsourcing, economic domination by major countries, and risks of global recession.

Recession

A significant decline in economic activity lasting more than a few months, visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.