Unemployment refers to a situation in which individuals are unable to find employment but are actively seeking employment. Unemployment represents a major cost to an economy, as it carries the opportunity cost of lost production, as well as increased social benefits and lost tax revenue. It also restricts domestic production and growth and causes many detrimental social costs, including loss of skills and tension within households. In recent years, sustained economic growth has been the best way to achieve a lasting reduction in unemployment. When economic growth is strong, there is usually an increase in aggregate demand (AD), meaning there are more job opportunities and more resources will be needed to meet demand. The annual federal budget for 2010-11 most recently forecast economic growth of 2% for this financial year, showing that Australia has indeed escaped the GFC. Consequently, unemployment is also expected to fall to 4.75 per cent in 2011-12 from the current 5.3 per cent in the March quarter this year. Australia has managed to keep the unemployment rate at a relatively low 5-6%, which is significantly lower than the OECD average. The RBA also forecasts growth rates of between 3.25% and 3.5% in 2010 and 2011. According to Okun's law, unemployment will decrease if the rate of economic growth is higher than the increase in the labor force. and productivity growth (Trading