Question

... define the nature rate of unemployment and also describe the social and economic costs of unemployment. give 3 paragraphs max

Answer 1

the amount of unemployment that an economy usually experiences, the long run average rate of unemployment. 5.7%The natural rate of unemployment is a combination of frictional, structural, and surplus unemployment. Even a healthy economy will have this level of unemployment because workers are always coming and going, looking for better jobs.

Three Components of the Natural Rate of Unemployment

Frictional Unemployment
Structural Unemployment
Surplus Unemployment

Both fiscal and monetary policymakers use that rate as the goal for a full employment. They use 2 percent as the target inflation rate. They also consider the ideal GDP growth rate to between 2 percent and 3 percent.

Unemployment is a universal problem more especially for the developing countries. Unemployment has an impact on the individual and on the economic well-being of the country. This will however, have a very detrimental effect on the community life and community development at local levels. The political leadership of every country has to deal with an unemployment problem since unemployment leads to poverty, low quality of life, social, political and economic ills.

The social costs of unemployment, i.e., the costs of unemployment to the nation as a whole regardless of how they are distributed, must be judged by considering the specific policy by which a worker would be reemployed. It is wrong to regard unemployment as either without cost (because the unemployed enjoy the opportunity for job search and leisure) or as having a cost equal to lost output.

Economic Costs The economic and social costs of unemployment include personal costs (lost income), costs to government (lost tax revenue) and costs to society in general (social problems, lost GDP

1. For the individual, the greatest economic cost of unemployment is lost income.
2. For society, the greatest economic cost of unemployment is the decrease in goods and services that occurs as a result of the unemployment.