Unit 9 Part 2

Question 1

Frictional unemployment

Answer 1

Unemployment due to people moving between jobs.

Question 2

Structural unemployment and example

Answer 2

Shifts in the economy create a mismatch between the skills workers have and skills needed by employers. Example: Workers loosing their jobs due to technology.

Question 3

Cyclical unemployment

Answer 3

Involuntary unemployment due to a lack of demand for goods and services.

Question 4

Seasonal unemployment

Answer 4

Seasonal changes in employment due to seasonal peaks and falls in demand

Question 5

NAIRU

Answer 5

National rate of unemployment is rate of unemployment that exists when the aggregate demand for labour equals the aggregate supply of labour at current wage rate and price level.

Question 6

Functions of money:

Answer 6

• Medium of exchange: people are willing to exchange their goods and services for money.
• Unit of account: people can measure the value of things in terms of money.
• Standard of deferred payment: people are willing to accept money as form of future payments.
• Store of value: people hold on to money because it generally keeps its value (although not if inflation is present).