Question

*unemployment

labor force

unemployment rate

employed worker

unemployed worker

__________________

problem:

unemployment rate

participation rate

employment population rate

_______________________________

type of unemployment:

_________________________________

how to measure value added:

define value added and its relation with GDP.

difference between GDP & GNP.

Answer 1

Unemployment.

Unemployment is a situation where the people cannot find job even though they are willing and able to do.

Labour force

The labour force is the number of people who are at working age and able and willing to work. It includes the people who are employed and unemployed.

Unemployment rate.

It is the percentage of total labour force which is unemployed.

Unemployment rate = number of unemployed people/ number of people in labour force×100.

Employed worker.

An individual on 16 years or above works for remuneration for a minimum of one hour in a week is considered to be and employed person.

Unemployed worker.

Unemployed person is one who is able and willing to work but do not have a job and have actively looking for a job for the past four weeks.

Unemployment rate.

It is the percentage of total labour force which is unemployed.

Unemployment rate = number of unemployed people/ number of people in labour force×100

Employment participation rate.

It is the percentage of labour force which is employed. The employment participation rate = number of people employed/ number of labour force×100.

Employment population rate.

It is the percentage of people employed from the total population. Employment population rate= number of employed people/ number of population ×100.

Types of unemployment.

The unemployment that generally found in an economy can be classified into the following categories.

1. Voluntary unemployment.

Voluntary unemployment is a type of unemployment where the people are not ready to work at the prevailing wage rate even if work is available.

2. Involuntary unemployment.

It is a situation where people are ready to work at the prevailing wage rate but could not find job.

3. Structural unemployment.

This type of unemployment occurs when there is a structural change in the economy. The change from ancient agrarian economy to most modern industrial economy results in this type of unemployment.

4. Disguised unemployment.

When more people are engaged in job than actually required, it is called disguised unemployment. The marginal product of the labour is zero because they are in excess of the labour required for the productive activity.

5. Underemployment.

This is an unemployment situation which occurs when people are partially employed.

6. Open unemployment.

It exists when people are ready to work but are not working due to the non-availability of work.

7. Seasonal unemployment.

The unemployment cause by seasonal change of production is called seasonal unemployment. For example in agriculture sector the people get employment only during agricultural season. Other times they are unemployed.

8. Cyclical unemployment.

The unemployment caused by business cycle is known as cyclical unemployment. During boom, people get employment while in recession they loss their employment.

9. Technological unemployment.

The introduction of new technology cause unemployment as the workers are unskilled and lacks training to suit the new technology.

10. Frictional unemployment.

This is a temporary unemployment which occurs when people move from one occupation to another.

Measurement of value added.

Value added is the value addition by all the producing units to the GDP during an accounting year. It is the difference between value of output produced by all producing units and value of intermediate consumption by all these units.

The value added is calculated to summing up the gross value added by producing units in primary sector, secondary sector and tertiary sector to the GDP.

Relation of value added to GDP

Value added is a method to measure GDP.

Difference between GDP and GNP

GDP includes the money value of goods and services produced with in the domestic territory of an economy. But GNP includes the money value of goods and services produced within the domestic territory of a country+ net income receipts from abroad in the form of dividends, interest and profit.

GNP= GDP+ Net factor income from abroad.