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UNEMPLOYMENT

UNEMPLOYMENT. MACRO-ECONOMICS STUDY UNIT 10. STUDY OBJECTIVES. Identify the various phases of the business cycle. Use economic indicators to determine the phase of the economy. Identify the types of unemployment. Identify policy measures to combat unemployment.

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UNEMPLOYMENT

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  1. UNEMPLOYMENT MACRO-ECONOMICS STUDY UNIT 10

  2. STUDY OBJECTIVES • Identify the various phases of the business cycle. • Use economic indicators to determine the phase of the economy. • Identify the types of unemployment. • Identify policy measures to combat unemployment. • Differentiate between the types of inflation. • Distinguish between the various indexes that are used to measure inflation. • Evaluate economic policy to combat inflation. • Explain the Philips-curve.

  3. UNEMPLOYMENT • Definition of unemployment • Types of unemployment: • Cyclical unemployment • Seasonal unemployment • Structural unemployment • Frictional unemployment • Economic cost of unemployment • Lost production • Demand for consumer and capital goods decrease – therefore income decreases • Personal hardships – social problems • Dietary problems

  4. UNEMPLOYMENT • Measures to combat unemployment: • Show graphically the effects of contractionary and stimulative economic policy • Training and retraining • Public works • Wage or employment subsidies • Lower minimum wages • Information programmes • SMME’s and the informal sector • Regional development programmes • Job creation by the public sector

  5. PHILLIPS CURVE • Relationship between inflation and unemployment • Show graphically • Indicate stagflation – increase in inflation and unemployment on Phillips curve. • Stagflation is when AS-curve shifts to the left on the AD/AS model.

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