structural and cyclical / demand-deficient unemployment and supply-side policies

Description

ASSIGNMENT:

Answer/Complete the following questions. Just one paragraph each. Notes from class and Youtube links under the questions. 

(a) Illustrate using a diagram the difference between structural and cyclical / demand-deficient unemployment. [10 marks]

(b) Using world examples, evaluate the view that the use of supply-side policies is the most effective method of reducing unemployment in the economy.

NOTES:

Types of unemployment: Cyclical (Demand Deficient)

The unemployment that results from a recession in a business cycle.
 

The decline in aggregate demand creates widespread unemployment

Financial      Crisis

COVID-19      Pandemic

Oil      Price Shock

Changes      in Interest Rates

Trade      Tariffs

Stock      Market Crash

Natural      Disasters

Geopolitical      Tensions

• Structural Unemployment
• Long term decline in the demand for labour in a specific industry. 
• Automation      (modernization)
• Technological      change
• Loss of comparative advantage
• Seasonal Umemployment
• Caused by the regular and periodic changes in demand for a certain goods or service. 
• School      bus drivers during summer holidays

Farm      help

Ski      instructors

Frictional Unemployment

This occurs when people are between jobs owing to the time delay from leaving a job and finding or starting a new one. This happens because it takes time to find and apply for the right jobs and for employers to find the right person for a job.