The Impact of Unemployment on the Economy Term Paper

The Impact of Unemployment on the Economy - Term Paper Example The success of a business relies on not only the own particular market and its own decisions but also the macroeconomic environment it operates within. The macroeconomic environment has a direct effect on the profitability and success of a business. This paper aims at dealing with one of the essential aspects of the macroeconomic environment of business, i.e. unemployment. This paper will deal with unemployment in detail and will include aspects like the meaning of unemployment, and the costs of unemployment. Also, a focus will be on the labor markets and unemployment. The study will also touch upon the two main types of unemployment, i.e. Disequilibrium unemployment and Equilibrium unemployment. Here an attempt will be made to explain the two types of unemployment and the various subcategories of these will also be touched upon. However, before moving on, it is essential to understand the meaning of a few terms like labor force, number unemployed, unemployment rate, and unemployment . Claimant Unemployment: This refers to the people who receive unemployment-related benefits (Sloman and Sutcliffe). This mainly measures all those who receive the unemployment-related benefits and claim the benefits to cover their expenses until they have a job. Standardized Unemployment Rate: This is an unemployment rate that is used by the International Labor Organization and the Organization for Economic Co-Operation and Development (Sloman and Sutcliffe). Here unemployed refers to people of the working age and who are without work. b) Costs of unemployment: Unemployment leads to numerous costs and these costs do not only influence the person unemployed but others as well. There are three main costs that are involved with unemployment are as follows: i) The first and most obvious costs involved are that incurred by the unemployed themselves.