Economics 2281 · O Level · Employment and unemployment
Employment and unemployment — practice question
Between 2012 and 2013 in Pakistan, both the annual inflation rate and the economic growth rate declined. A number of economists argued that the Government ought to cut government spending in order to push inflation down further. If inflation became lower, economic activity could rise and unemployment could fall.
(a)[2]
Define ‘unemployment’ in economic terms.
(b)[4]
Explain two separate causes of economic growth.
(c)[6]
Analyse why a fall in the inflation rate may reduce a country’s unemployment rate.
(d)[8]
Discuss whether a decrease in government spending will reduce inflation.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme.