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25 Cards in this Set

  • Front
  • Back

Employed persons

People over 15

Willing/able to find work

Unemployed persons

People over 15

Actively seeking work, but unable to

Labour force

People over 15

Willing/able to find work

Non-labour force

People over 15

Unwilling/unable to find work

Unemployment rate

- Measuring Labour Force

- Survey

- Limitations: may life, small sample size

= unemployed seeking work / unemployed seeking work + employed

Participation rate

- Measuring Labour Force

% of people over 15 willing/able to to work

= WAP - employed - unemployed seeking work / WAP

Underutilisation rate

- Measuring Labour Force

% of the sum of the number of people unemployed and the number underemployed

Full employment

Concept where all/most individuals who want to work are able to find work





Rate of


- Unemployment is low, but not so low that is causes inflation to rise.

- You want some unemployment, or they'll be an increase in demand, but supply will be insufficient

Hidden Unemployment

People over 15 who could work, however aren't actively seeking

- Hidden from data

Disguised/Under Employment

People are working, but not to full capacity

- Part time

- Overqualified

Cyclical Unemployment

Occurs when there is a downturn in the economy

- Less growth = more cyclical unemployment

Natural Unemployment

Occurs naturally in the economy

- Government can't control

Seasonal Unemployment

Type of natural unemployment

- Unemployment depending on the season

EG: tourism, skiing, public holidays, farming

Structural Unemployment

Type of natural unemployment

- Occurs due to changes in the structure of the economy

EG: technological advances

Frictional Unemployment

Type of natural unemployment

- When people are inbetween jobs

EG: builders, entrepreneurs, freelance writers, painters, actors

Hardcore Unemployment

Type of natural unemployment

- People who are unemployed for extended period of time

EG: past prisoners, disabled, high demand for certain job

Aggregate demand

AD = C + I + G + (X-M)

Aggregate supply

- Availability of Resources

- Cost of production

- Efficiency/Productivity

Ceteris Paribas

- All other things being equal

- Only look at one thing in isolation, separate from other factors

Factors effecting unemployment - AD




Aussie dollar

Interest rates

Factors effecting unemployment - AS


Natural Disaster

Ageing population

Interest rates

Tech advances

Taxes (company, income)

Government Policies to generate unemployment - Demand

Monetary Policy - manipulates interest rates

- Decreased interest rate

- Increase in discretionaryincome (income after paying off loans)

- Increase in householdconsumption.

- Increase in aggregate demand

- Correspondingincreased GDP as well as a higher demand for labour

- Decrease in unemployment – Ceteris Paribas.

Government Policies to generate unemployment - Supply

The Budgetary/Fiscal Policy - manipulates the governmentrevenue and expenditure

-Increased spending on infrastructure

- Increase in efficiency.

- Increase in AS

- Corresponding increased GDP

- Higher demand for labour

- Decrease in unemployment – Ceteris Paribas.

Impacts of Unemployment on Living Standards


- GDP per capita


- Crime rate

- Drugs/alcohol

- Happiness

- Mental Health

- Socia cohesion