Economics 0455 · IGCSE · Employment and unemployment
Employment and unemployment — practice question
In 2014, the inflation rate in the United States of America (US) stood at 2.0%. US unemployment was 6.1%, which was the lowest level for six years. The economy had still not reached full employment, although not every job vacancy had been filled. A larger share of US students was entering university. Investment, meaning expenditure on capital goods, was rising.
(a)[2]
What opportunity cost does a person face when choosing to attend university?
(b)[4]
Explain why some people may be unemployed even though job vacancies exist.
(c)[6]
Analyse how a rise in investment may affect unemployment.
(d)[8]
Discuss whether supply-side policy measures are likely to reduce inflation.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Best alternative sacrificed” …