(a) Define the term unemployment. (b) Highlight the effects of unemployment on an economy.

Explanation

(a)Unemployment occurs when persons within the labour force and who are able and willing to work cannot find jobs.

(b) i) Unemployment increases crime rate and other social vices resulting in insecurity of lives and properties.

(ii) it reduces the level of the GDP and per capita income.

(iii) it affects standard of living.

(iv) it leads to stagnation of the economy. It may lead to a depression in the economy.

(v) it may lead to under-employment e.g. a graduate doing a clerical job for a clerical pay.

(vi) it increases the burden of dependants in the economy.

(vii) it may induce emigration, i.e. loss of skilled labour to other countries.