This is because the more the individuals who earn income, the more they contribute to the growth of the economy through taxation and development. However, when the employment level is low, it means that…
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The second one that is known as underemployment occurs when workers underutilize their skills in their current employment, and the last one takes place when individuals stop finding jobs because they are discouraged with their fruitless effort of finding one (Thompson 78). All these forms of unemployment lower the Gross Domestic of a country. This paper will analyze how unemployment, discouragement, and underemployment lower GDP.
First of all, when individuals finish school, they start seeking employment in the labor market. Some become lucky and get jobs while others remain on the search. The state refers to those who fail to get employed at the existing wage rates as the unemployed. These individuals continue depending on their parents for funds that help them to survive and continue with the job search. The unemployed may also depend on their friends who were lucky to get jobs after school. This further increases the dependency ratio in the economy. This means that the individuals, who support the unemployed by giving them funds, reduce the amount of income that they save and invest (Thompson 81). They instead increase the amount of money that they set apart for consumption. The reduction in savings means that these individuals earn less interest than they used to earn before. The reduction in interest rate then means that they earn less income from investment activities and this reduces the overall income of a country. The effect of this unemployment is based on Okun’s law that states that a 1% increase in the rate of unemployment leads to a 2% decrease in the GDP (Boyes and Michael 226).
The other form of unemployment takes place when workers discontinue their job search because of hopelessness. These individuals lose hope based on the belief that they will never secure a job in the labor market at the existing wage rates. The loss of hope makes these individuals to either continue depending on their relatives and friends or engage in
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However, due to increasing concerns of rural unstableness, liberal relaxations of Chinese rural policies were announced between 1984 and 1989. Under one-child policy, a couple from urban area can have only one -child whereas a couple from rural area may have two kids if the first kid is a girl.
This is because budget cuts imply reduced federal government expenditure in key sectors of the economy, which in turn reduces production in the public sector (Dwivedi, 2010). The current budget cuts proposes cuts in state services, producing a wide economic chain response across the government and putting private- sector and public-sector jobs at risk.
The main focus in the paper is on the GDP indicator, that is an aggregate measure of total economic production for a country. GDP represents the market value of all goods and services produced by the economy during the given period. The World Bank has termed GDP as the main criterion for classifying economies.
The White House along with the past and present presidents of the country has always had a strong stance against the legalization of Marijuana due to the perceived ill effect the Cannabis plant can have on the health of people. Regardless of the official position of the White House though, 16 out of the 50 states have already legalized the use of marijuana within their borders to hugely positive results.
However we can as well blame this on the population increase but all the same it is because of poor planning. Population can not be an issue of concern if birth rate is being controlled.
Over the past four years the issue of unemployment has affected America and the world at
The fast development of the nation along with the robust lifestyle of its people creates an urge in the people to migrate to the country and enjoy the same opportunities as its citizens. The different countries in Western Europe
n the other hand, macroeconomics focuses on the characteristics of the economy as a whole and not individual person or sector as in the microeconomics (Salvatore,1991). This research paper explores the indicators of economy and the necessary policies put or to be put in place in
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