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Essay On Effects Of Unemployment

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Macroeconomic variables are the indicators or main signposts signaling the current trends in the economy. Unemployment is one of the macroeconomic variable.

Unemployment:
Unemployment is when a person is searching for a job but could not find one,they are actively searching and are willing to do work.
Unemployment rate is a measure of the number of people who are both jobless and looking for a job.Economy faces high unemployment in the period of recession.6% of world’s workforce were without job in 2012 according to ILO report.
Unemployment have a negative impact on the growth of the economy.It is harmful for the economy’s growth because it increases poverty and waste resources.
There are three types of unemployment which are cyclical,frictional and structural unemployment.
Structural unemployment is due to lack of skills or wrong area desired
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Effect of unemployment on economy
Some of the well-known effects of unemployment on the economy are:
Unemployment financial costs
The government and the nation in many countries the suffer. Government has to pay the unemployed some benefits. The greater the number of the unemployed or the longer they are without work the more money the government has to shell out. The nation not only therefore, has to deal with the lost income and decreased production but also with additional cost.
Spending power
The spending power of an unemployed person and his/her family decreases drastically and they would rather save than spend their money, which in turn affects the economy adversely.
Reduced spending power of the employed
Increased taxs and the insecurity about their own work may affect the spending power of the working people as well and they too may start to spend less than before north ayrshire affecting the economy and also the society in a negative manner.
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