Macroeconomics Of Unemployment

Human wants are generally insatiable, yet the means of ensuring these wants are limited simply because the world has only limited amounts of resources which comprise of human wants that are grossly limited both in number and skills (this is where unemployment arises). Recession happens if output in the economy reduces, this is to say that growth becomes negative. When people spend less, shops will be left with unsold stocks, which will result in purchasing less from the producers, which in turn will cut down on production. Unemployment is likely to result from cutbacks in production. When firms produce less, they need fewer employees.

Macroeconomics Name: Institution: Macroeconomics The basic thesis that the article describes in comprehension is the impact that unemployment has on businesses. Bruce Bartlett, the author, explains that businesses can rake in huge profits from their businesses during unemployment seasons because of the reduced operational costs that businesses usually incur. However, the businesses experience challenges when seeking to increase their output because the unemployed people lack the purchasing power to buy their products or services.

Unemployment in the United States - The True Story This article is an attempt to examine the numbers of unemployment in the United States more closely. It contends that the Bureau of Labor Statistics misrepresents the percentage rate of unemployment in the United States in its monthly surveys. The definition to unemployment given by the Bureau of Labor Statistics in the article is as follows: “People who had no employment during the reference week and that were available for work at the time, they made efforts to find employment sometime during the four week period ending with the reference week.”

Fifth, the reasons of unemployment used to be thought as personal error and lacks, but then it started to be thought that unemployment is reasoned by state and institutions’ inefficient conditions.

People need money to purchase all kinds of goods and services they needed every day and sometimes, for goods or services they desire to own. To fulfill that, they have the essential need to earn money. In order to earn money, they must work in either in fields related to their interests or to their qualifications. However, people will meet different challenges during their jobs-hunting sessions, such as many candidates competing for a job vacancy; salaries offered are lower than expected salaries and economic crisis or down which causes unemployment. Unemployment is what we will be looking into in this report. Dwidedi (2010) stated that unemployment is defined as not much job vacancies are available to fulfill the amount of people who want to work and can work according to the current pay they can get for a job they chose to work as. There are four major types of unemployment: frictional, structural, cyclical and seasonal unemployment.

The trends in unemployment affect three important macroeconomics variables: 1) gross domestic product (GDP), 2) unemployment rate, and 3) the inflation rate.

Layard, Richard, Stephen Nickell, and Richard Jackman. 1991. Unemployment: Macroeconomic Performance and the Labour Market. Oxford: Oxford Univ. Press.

The unemployed are the people who are registered as willing, able and available for work at the market-clearing wage, but who are unable to find work. Spain’s unemployment situation is also known as cyclical unemployment. Cyclical unemployment arises due to fluctuations in the nation’s business cycle, it can also be referred to as demand deficient unemployment. It occurs when a contraction in private or public spending reduces AD and leads to a fall in national output. A fall in national output can be crucial on an economy as the demand for labour falls and there is downward pressure on wages and prices. Regarding Spain, the government budget cuts therefore explain the rise in unemployment rate over the three month time period. The graph below shows us the situation in Spain.

According to Roger LeRoy Miller, in the Economics Today textbook, unemployment is the number of adults that are able to work, are currently looking for a job, but have not yet found one. There are four main types of unemployment: frictional, structural, cyclical, and seasonal. Frictional unemployment is where the

Unemployment issue can lead to a lot of impacts to the economic growth. Higher unemployment rate will lead to increase government borrowing. When people are without their job, they would paid less in the income tax. So, it will cause a drop in tax revenue because there are lesser people paying income tax and spending less. Due to the loss of earnings to the unemployed, the government need to spend more subsidy for them in housing benefits and income support.