00:01
There are five parts in the following question.
00:03
The first part, unemployment rate can be calculated by the following formula.
00:09
Unemployed, divided by the labour force, multiplied by 100.
00:13
Looking at the definitions of the following terms.
00:16
People are classified as unemployed if they do not have a job, have actively looked for work in the prior four weeks and are currently available for work.
00:26
Labor force.
00:27
The labour force comprises of all those who work for gain, whether as employees, employers or as self -employed, and it includes unemployed who are seeking work.
00:38
Even though we have a mathematical formula to calculate the unemployment rate, it has much criticism.
00:45
The factors making it difficult to determine the unemployment rate are part -time employment.
00:51
The bls has listed part -time workers as fully employed.
00:55
These workers might be part -time workers due to other circumstances.
00:59
Some may be in the process of finding better and permanent job or they might be looking for better working hours.
01:06
Thus, by counting them as fully employed, we will understate the unemployment rate.
01:13
Discouraged workers.
01:15
Workers who could not find suitable jobs and have given up hope are called discouraged workers.
01:20
By not accounting for these, we also understate the unemployment rate.
01:25
These are the two factors that might be a cause of criticism.
01:29
Moving on to the next part of the question, we need to differentiate between the three forms of unemployment, frictional, structural and cyclical.
01:39
Let us look at the definitions of each.
01:41
Frictional, it refers to a situation where workers are between jobs since they may be shifting from one job to another to better suit their needs.
01:49
They have marketable skills and live in areas where jobs are available.
01:53
Structural, it refers to workers who are unemployed since they do not have marketable skills and or become.
01:59
They live in areas where jobs are not easily available...