Economics 9708 · AS & A Level · Monopolistic competition

Monopolistic competition — practice question

In country S, frictional unemployment has fallen, whereas in country T, structural unemployment has risen. What are possible reasons for these changes?

  • Acountry T: real wage rates are flexible; country S: a reduction in job search times
  • Bcountry T: the closure of several large mining firms; country S: more job vacancy websites
  • Ccountry T: a fall in economic growth; country S: unemployment benefits have decreased
  • Dcountry T: workers’ skills do not match available jobs; country S: unemployment benefits have increased

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