Economics 9708 · AS & A Level
Price stability and inflation
100 practice questions on Price stability and inflation, with worked solutions and instant marking.
What type of unemployment could result from a global fall in demand for electronic goods?
Feb/March 2016
Which labour market data pattern is most likely to suggest an increase in cyclical unemployment? alterations in compulsory redundancies / voluntary resignations
Feb/March 2016
What evidence is given in the information for the statement that youth unemployment has been ‘hit hardest’?
Feb/March 2016
Which government policy would be the most effective for lowering frictional unemployment?
Feb/March 2017
The graph illustrates how the unemployment rates in countries X, Y and Z changed during the period 2000 to 2010. All three countries experienced recession from 2008 to 2010. Which conclusion can be drawn from the graph about the period 2000 to 2010?
Feb/March 2020
A report in 2017 indicated that, by 2030, automated robots might put 33% of current jobs in the UK at risk, compared with 38% in the US and 21% in Japan. Jobs in manufacturing and retail were seen as being at the highest risk. Which type of unemployment is shown in the paragraph above?
Feb/March 2020
Two members of the Hernandez family have recently lost their jobs. Mariana has lost her job at the local factory, which has shut because of competition from cheaper imports. Alfonso has lost his job as a shop assistant because sales have fallen during a recession. How would an economist categorise these job losses?
Feb/March 2021
An economy has a natural rate of unemployment of 5%. What will occur if a government continues attempting to reach a 3% target rate of unemployment through expansionary monetary policy?
Feb/March 2021
Explain why an economy may be in equilibrium at a level of output below full employment, and critically assess alternative policy options that could be used to raise output to full employment.
Feb/March 2021
What term is used for short-term unemployment while people are moving from one job to another?
Feb/March 2022
The table presents figures for an economy’s labour market. number of people of working age 42.7 million; number of people of working age who are actively seeking work, but are not working 2.2 million; number of people of working age who are not actively seeking work 9.4 million. What is the economy’s percentage employment rate, to the nearest whole number?
Feb/March 2022
A government introduces an expansionary fiscal policy in order to raise the economic growth rate. Which other main macroeconomic aim is this policy most likely to support?
Feb/March 2023
To work out the unemployment rate, the number of unemployed people is compared with
Feb/March 2024
Which set of factors is most likely to cause structural unemployment to decrease?
Feb/March 2024
What reasons could explain why country X has a higher natural rate of unemployment than country Y?
Feb/March 2024
Explain what factors may result in unemployment.
May/June 2009
The diagrams illustrate how a country’s production possibility curve changes from Year 1 to Year 2. What can be deduced from the diagrams?
May/June 2010
The diagram illustrates how the numbers of people employed in four different industries in a city changed from 2002 to 2007. What conclusion can be drawn from the diagram?
May/June 2010
An economy is functioning at its natural rate of unemployment. In monetarist theory, what effect would an unexpected rise in the money supply have on unemployment in the short run and in the long run?
May/June 2010
Which factor is most likely to lead to an increase in the natural rate of unemployment?
May/June 2010
An economy is functioning at its natural rate of unemployment. In monetarist theory, what impact will an unexpected rise in the money supply have on unemployment in the short run and in the long run?
May/June 2010
Which factor is most likely to cause the natural rate of unemployment to rise?
May/June 2010
An economy is currently at its natural rate of unemployment. In monetarist theory, what effect will an unanticipated rise in the money supply have on unemployment in the short run and in the long run?
May/June 2010
Which is most likely to cause a rise in the natural rate of unemployment?
May/June 2010
Explain the causes of unemployment in an economy.
May/June 2010
Explain the main causes of unemployment.
May/June 2010
The table presents inflation rates, unemployment rates and changes in money wage rates from 2008 to 2009 for several countries. What conclusions can be drawn from the table?
May/June 2011
An economy is functioning at its natural rate of unemployment. In monetarist theory, what effect will an unanticipated rise in the money supply have on unemployment in the short run and in the long run?
May/June 2011
The diagram illustrates the link between the inflation rate and the unemployment rate. What would make the curve FG move to JK?
May/June 2011
An economy is functioning at its natural rate of unemployment. In monetarist theory, what impact will an unexpected rise in the money supply have on unemployment in the short run and in the long run?
May/June 2011
The table shows unemployment rates (%) for four countries in 1993 and 2002. What can be inferred from the table?
May/June 2012
A country saw unemployment drop sharply, yet its inflation rate stayed low. What might account for this?
May/June 2012
A country saw unemployment drop sharply, yet its inflation rate stayed low. What might account for this?
May/June 2012
The table shows unemployment rates (%) in four countries in 1993 and 2002. What conclusions can be drawn from the table?
May/June 2012
The graphs show a country’s economic performance from 2007 to 2010. Which conclusion can be drawn from the graphs?
May/June 2012
The number of people in employment in a country and the unemployment rate both fall. What might account for this?
May/June 2012
The graphs show a country’s economic performance from 2007 to 2010. Which conclusion can be drawn from the graphs?
May/June 2012
Both the number of people in work in a country and the unemployment level fall. What might account for this?
May/June 2012
For a closed economy without government intervention, the equilibrium income is $25 million, the full employment income is $30 million, and the deflationary gap is $1 million. What conclusions can be drawn from this information?
May/June 2012
Does this information on the size of the economy (GDP) let you conclude that the average person in Italy is better off than the average person in Ireland? Briefly explain your answer.
May/June 2012
A government minister says that the principal economic advantage of placing a new factory in a coastal region is the 500 jobs that it will generate. What does this suggest about the coastal region?
May/June 2013
The table shows information about unemployment rates and spending on unemployment benefits in the United Kingdom in 2007 and 2009. 2007: unemployment rate 2.7%, expenditure on unemployment benefits as % of GDP 1.6. 2009: unemployment rate 4.7%, expenditure 3.4% of GDP. What can definitely be concluded from the table?
May/June 2013
In a country where the population is 100 million, 60 million people are of working age and 50 million are in the labour force. If the unemployment rate stands at 10%, how many people have jobs?
May/June 2013
Explain how unemployment and inflation are measured.
May/June 2013
Which labour-market data trend would be most likely to show a rise in cyclical unemployment? (changes in compulsory redundancies / voluntary resignations)
May/June 2013
What would an economist consider when applying social cost-benefit analysis to evaluate policies intended to lower the level of unemployment?
May/June 2013
Which labour market data pattern is most likely to show a rise in cyclical unemployment? rises in compulsory redundancies / voluntary resignations
May/June 2013
When applying social cost-benefit analysis to judge policies aimed at lowering unemployment, what factors would an economist include? changes in crime levels / changes in mental wellbeing / changes in job skills
May/June 2013
A newspaper reported that ‘unemployment had increased for the third month in a row.’ What could be the reason for the rise in unemployment?
May/June 2013
In 2011, one of the UK’s largest multinational banks reported plans to cut its workforce by 43 000 around the size of a small town. Unemployment in the UK had climbed to almost 3 million in 2011. Analyse what might cause an increase in unemployment in a country.
May/June 2013
A newspaper stated that ‘unemployment had increased for the third month in a row.’ What could have caused the rise in unemployment?
May/June 2013
What is likely to happen if unemployment rises permanently and workers lose their skills?
May/June 2014
What is most likely to happen in the short run if central planning is replaced by a market-based system?
May/June 2014
Turkey's population was 73 m in 2007. Its labour force amounted to 36 m, of which 12 m were trained for the primary sector and 24 m were trained for the secondary and tertiary sectors. Unemployment stood at 10%. What was the number of people unemployed?
May/June 2014
The table gives the unemployment rate and the labour force size for four countries in 2012. Which country had the greatest number of people in employment in 2012? country A Egypt unemployment rate 12.6% labour force 27.7 million; B Iran 15.3% 26.4 million; C Italy 9.3% 25.1 million; D Turkey 8.0% 27.4 million.
May/June 2014
The table presents a country’s employment figures. Population of working age: 100 million; number in employment: 60 million; number unemployed: 4 million. What are the participation rate and the unemployment rate?
May/June 2014
The graph illustrates the changes, shown as an index, in employment and GDP in the United Kingdom from 2008 to 2012. What conclusion can be drawn from the graph?
May/June 2014
An economic recession causes unemployment to rise. Why might this result in a decrease in an economy’s long-term growth rate?
May/June 2014
The graph illustrates the changes, shown as an index, in employment and GDP in the United Kingdom from 2008 to 2012. What conclusion can be drawn from the graph?
May/June 2014
Explain the possible causes of unemployment and explain which one accounts for most unemployment in your country.
May/June 2014
Which measure gives the clearest indication of the economic cost caused by a rise in unemployment?
May/June 2015
A country sees unemployment rise because of a shortage of aggregate demand. If tax rates and rates of unemployment benefit stay unchanged, what effect will this have on tax revenue and government expenditure?
May/June 2015
Describe how consumer theory suggests a rise in income will alter a consumer’s demand for a normal good and for an inferior good.
May/June 2015
Which type of unemployment is linked to a shortfall in aggregate demand?
May/June 2016
The table shows an economy’s unemployment rate and inflation rate over a five-year period. Which change from one year to the next matched the Phillips curve analysis?
May/June 2016
Which kind of unemployment arises when aggregate demand is too low?
May/June 2016
What is most likely to increase if unemployment is rising in an economy?
May/June 2016
What is one reason for seasonal unemployment?
May/June 2016
What is one possible pairing of a cost and a benefit linked to increasing unemployment levels?
May/June 2016
The graphs illustrate consumer prices and unemployment in Ireland from 2002 to 2007. What conclusion can be drawn from the graphs?
May/June 2017
Which policy is specifically intended to lower the level of structural unemployment?
May/June 2017
Why do some economists argue that frictional unemployment may create positive benefits?
May/June 2017
What will happen in the short run when unemployment rises in an economy?
May/June 2017
What assumption is made in the explanation of cyclical unemployment?
May/June 2018
A nation has a total population of 100 million. Five million individuals are unemployed, and the unemployment rate is 10%. What is the size of the labour force?
May/June 2018
Which type of unemployment is matched correctly with the description of its cause?
May/June 2018
What term is used for short-term unemployment while people are changing jobs?
May/June 2018
Distinguish between structural and frictional unemployment. Consider which is likely to have the greater negative effect on an economy.
May/June 2018
A country operates a fixed exchange rate. Which pairing of problems would be most likely to lead the country’s government to cut taxation and reduce interest rates?
May/June 2019
The diagram displays the number of unemployed persons (in millions) in the European Union from 2000 to 2016. In which period did unemployment rise at the fastest rate?
May/June 2019
A large coal mine has to shut down because demand for coal falls as consumers move to fuels that pollute less. The government arranges retraining courses and recruitment events for the coal mine workers. Which type of unemployment is the government trying to reduce?
May/June 2019
What is most likely to rise if an economy moves into a negative output gap?
May/June 2019
The table shows the inflation and unemployment rates for various countries in 2008 and 2011. Which country or countries showed a trade-off between their inflation and unemployment rates?
May/June 2019
State one cause of seasonal unemployment.
May/June 2019
The diagram presents the number of unemployed persons (in millions) from 2000 to 2016 in the European Union. In which period did unemployment rise at the fastest rate?
May/June 2019
A coal mine is compelled to shut after demand for coal drops as consumers move to fuels that cause less pollution. The government arranges retraining programmes and job fairs for the coal miners. Which type of unemployment is the government trying to reduce?
May/June 2019
What is most likely to rise if an economy moves into a negative output gap?
May/June 2019
Cyclical and structural unemployment are the two most prevalent forms of unemployment. Explain the causes of these types of unemployment and assess the effectiveness of government policies to reduce them.
May/June 2019
A country saw a large decrease in unemployment, yet its inflation rate stayed low. What might account for this?
May/June 2020
It is particularly hard for young workers to obtain a job when the economy is in recession. A government sets up a transfer payment for people looking for work and also gives details of available vacancies. What would be a beneficial result of this policy for people looking for work?
May/June 2020
The diagram presents selected US labour statistics from 2001 to 2013. What conclusion can be drawn from the diagram?
May/June 2020
Which statement explains what the Phillips curve illustrates?
May/June 2020
Following negotiation, the workers in an industry secured higher wage rates from employers. The employers’ spokesperson stated that ‘the cost of the deal would need to be covered by improved productivity or by cuts in other costs’. Analyse whether this deal can be fitted into the economic theory of wages and assess the likely employment result of such a deal.
May/June 2020
From 2011 to 2013, retailers said that spending on goods made locally and on imported goods had fallen. This happened because consumers did not borrow money, since the economy was in recession. What is the most likely outcome of this?
May/June 2021
What needs to be counted when calculating the number unemployed? all people of working age who are not in employment; people of pension age who still wish to work; part-time workers looking for full-time employment
May/June 2021
Unemployment in an economy rises. What is a likely consequence?
May/June 2021
Explain the causes of unemployment and assess which is most likely to arise in a developing country.
May/June 2021
Which type of unemployment is linked to a shortfall in aggregate demand?
May/June 2022
The table presents the rate of inflation (consumer prices index) and the monthly percentage rate of unemployment for the USA across a six month period in 2017. What conclusion can be drawn from this table?
May/June 2022
Which outcome is the least likely result of a substantial increase in unemployment during an economic recession?
May/June 2022