Waec Model Questions Vol1 2025 Economics Question 7

Practice objective / multiple choice question 7 from the 2025 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2025 Economics Objective / Multiple Choice Medium Difficulty
Question 7 WAEC_MODEL_QUESTIONS_VOL1 • 2025 • ECONOMICS • objective

In a country with a labour force of 10 million, the actual unemployment rate is 12 %. The frictional unemployment rate is 3 % and the structural unemployment rate is 4 %.\n(a) Calculate the cyclical unemployment rate and the number of people who are cyclically unemployed.\n(b) If the government wants to reduce cyclical unemployment to 2 % by stimulating aggregate demand, and Okun's law states that a 1 % fall in the unemployment rate raises real GDP by 2 %, what percentage increase in real GDP is required?

Answer Options

A. Cyclical unemployment rate = 6 %; number of cyclically unemployed = 600,000; required GDP increase = 7 %
B. Cyclical unemployment rate = 3 %; number of cyclically unemployed = 300,000; required GDP increase = 4 %
C. Cyclical unemployment rate = 4 %; number of cyclically unemployed = 400,000; required GDP increase = 5 %
Correct Answer D. Cyclical unemployment rate = 5 %; number of cyclically unemployed = 500,000; required GDP increase = 6 %
Correct Answer
D
Correct Option:
Cyclical unemployment rate = 5 %; number of cyclically unemployed = 500,000; required GDP increase = 6 %

About This Question

This is Waec Model Questions Vol1 2025 Economics Question 7. It is one of the objective questions from the 2025 Waec Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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