Economics 0455 · IGCSE · Employment and unemployment
Employment and unemployment — practice question
From 2008 to 2014, Greece’s Gross Domestic Product decreased by 25%. Many sole proprietors and other businesses closed down. As a result, unemployment climbed to 28%. The Government cut its spending and was being urged by the International Monetary Fund to lower its corporation tax (the tax on firms’ profits).
(a)[2]
Identify two consequences of unemployment.
(b)[4]
Explain two advantages enjoyed by a sole proprietor.
(c)[6]
Analyse how a decrease in government spending may affect unemployment.
(d)[8]
Discuss whether a cut in corporation tax will increase economic growth.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Reduced output” …