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11) Explain what is meant by ‘involuntary unemployment’ and how economists from different schools of thought might address it?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter32: Macroeconomic Policy Around The World

Section: Chapter Questions

Problem 6SCQ: Explain how the natural rate of unemployment may be higher in low-income countries.

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11) Explain what is meant by ‘involuntary unemployment’ and how economists from different schools of thought might address it?

Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.

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Explain how the natural rate of unemployment may be higher in low-income countries.
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1. Different schools of thought in economics have differing views on whether unemployment is voluntary or involuntary . Using the theoretical arguments from these different schools , discuss how each school would explain the unemployment issue. (Note the issue may be explained graphically . All curves , axes , etc. must be fully labelled . An explanation of what your diagram is illustrating is required.)
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