keynesian economics

Topics: Keynesian economics, Unemployment, Inflation Pages: 7 (2284 words) Published: March 23, 2014
NAME: Firdausi Ali

COURSE: NCUK/IFY

MODULE: Economics (coursework 2)

DATE GIVEN: 10th February, 2013

DATE TO BE SUBMITTED: 02nd March, 2013

TUTOR: Mr. Lawal G. and Mr. Adedeji
QUESTION
Keynesian solution to unemployment was higher public spending which through the multiplier process would generate income and more jobs. Explain how this solution works and are there other solutions to the problem of unemployment?

INTRODUCTION
The world is facing a serious problem of unemployment it has become a major disturbance to the growth of the economy. In the world Libya is noted to have the highest rate of unemployed citizens. In Nigeria we have the problem of unemployment it has become a major problem. Unemployment Rate in Nigeria increased to 23.90 percent in 2011 from 21.10 percent in 2010. Unemployment Rate in Nigeria is reported by the National Bureau of Statistics. From 2006 until 2011, Nigeria Unemployment Rate averaged 14.6 Percent reaching an all time high of 23.9 Percent in December of 2011 and a record low of 5.3 Percent in December of 2006. In Nigeria, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force. John Maynard Keynes who was once a student of Alfred Marshall introduced what he thought would completely solve the unemployment problem which is called the Keynesian unemployment, from the 1930’s to 1970’s government tended to follow the Keynesian policy on how to control the economy and because the need for the solution to unemployment was essential
UNEMPLOYMENT
Unemployment can be expresses either as a number (e.g. 1.5million) or as a percentage (e.g. 5per cent). But we should consider the group of people who are out of jobs which are those of working age who are without work, but who are available for work at current wage rates or unemployment could be known as the number of people who are lacking jobs. Keynesian economists think that in recessions a sizable fraction of unemployment. Unemployment increases because more people are hunting for better jobs during recession, not because they cannot find jobs. If it is to be expressed as a percentage, then it is the percentage of the total labour force. The labour force is defined as: those in employment (including the self-employed, those in the armed forces and those on government training schemes) plus those who are unemployed. Thus if 22.5million people were employed and 2.5million people were unemployed, the unemployment rate would be:

TYPES OF UNEMPLOYMENT
There are three main categories of unemployment. They are:
Structural unemployment
This is a serious type of unemployment where the labour demand is less than the supply in an individual labour market economy. Under the structural unemployment there are sub types; one example is the regional unemployment this is said to be of existence when there is a lack of mobility of factors of production between the regions. During the post-war period, the South of England has tended to be at full employment while regions such as Northern Ireland have constantly suffered from unemployment. Another example is the sectoral unemployment, shipbuilding and steel industries declined harshly in the late 1970’s and early 1980’s leaving a substantial number of skilled workers unemployed. Unfortunately their skills were no longer desired in the economy rendering them unemployed and without retraining and possible transfer, they were therefore unable to adapt to the varying demand. Technological unemployment is another example under the structural unemployment; this is when groups of workers across industries may be put out of work by new technology. Again, with no retraining and geographical mobility these workers may stay unemployed. Cyclical or demand-deficient unemployment

This is a type of unemployment which could also be referred to as Keynesian "demand deficient" unemployment. Economies tend to face...
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