2019•Oxford University Press eBooksRequires access
Unemployment
Andrew Gillespie
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Abstract
This chapter examines the causes and problems of unemployment and considers how it can be reduced. One of the major economic objectives of governments is the reduction of unemployment. There are several causes of unemployment which can be cyclical (or demand-deficient) unemployment, structural unemployment, and seasonal unemployment. The equilibrium, or natural rate of unemployment, measures those unemployed when the labour market is in equilibrium. Unemployment represents a waste of resources and means the economy is not producing as much as it could. Governments will use different policies to reduce unemployment depending on the cause.