Question

1. True or False. If the Employed Persons Figure increases, the unemployment rate must decrease.   [2 marks]

2. Explain what the implications of moving towards a ‘gig economy’, where fewer people work full-time jobs, will have on the unemployment rate and on the output of the economy. [2 marks]

3. Based on each of the following descriptions of an individual, answer whether they would be considered ‘unemployed’ or ‘not unemployed’. If they are ‘unemployed’, suggest whether you think it is frictional, structural, seasonal or cyclical unemployment. You must provide reasons for you answers. The correct answer with no explanation will not receive any marks. (1 mark each)

1. A 14-year-old is actively looking for a part time pet care job. He applied for three positions but received no responses.
2. A 40-year-old chef was made redundant and loses her job because of COVID-19 pandemic (lack of demand for consumption goods). She is looking for a new job but is struggling to find one.

Answer 1

1. The given statement is true, if the employed persons figure increases, unemployment rate must increases. Because labor force is the total sum of employed and unemployed persons. So as employment rate rises, unemployment will fall and as employment figures falls, unemployment will rise.
2. A gig economy refers to a situation where few people work full time job and most organisation hire people only for short periods of time ( temperory jobs).
Gig economy leads to increase unemployment rate. Unemployment should be higher because gig economy workers should be counted as unemployed. They also make less money and earn lower wage rate. As gig economy increases unemployment, it will reduce output in the economy. Because most of the jobs under gig economy would be temperory
3. A 14 year old is actively
Looking for a part time pet care job. He applied for three positions but received no responses. He is neither unemployed or employed. Because he is not included in labor force. There are number of acts which prohibit the employment of children below 14 years and 15 years .
4. A 40 year old chef was made redundant and loses her job because of Covid -19 pandemic. She is looking for new job but is struggling to find job. She is an unemployed person. She is frictionally unemployed. Because she has no job at present, but searching for a new job