Gce Model Questions Vol1 2021 Economics Question 4

Practice objective / multiple choice question 4 from the 2021 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2021 Economics Objective / Multiple Choice Medium Difficulty
Question 4 GCE_MODEL_QUESTIONS_VOL1 • 2021 • ECONOMICS • objective

Initially, frictional unemployment is 2.5 % and structural unemployment is 4 %. Cyclical unemployment is 3 %, giving an actual unemployment rate of 9.5 %. A government training programme reduces frictional unemployment by 0.5 percentage points and structural unemployment by 1 percentage point, while cyclical unemployment remains unchanged.\n\nCalculate the new actual unemployment rate and the percentage reduction in total unemployment compared with the initial rate.

Answer Options

Correct Answer A. New actual unemployment = 8.0 %; Reduction = 1.5 % points (≈15.8 % decrease)
B. New actual unemployment = 7.5 %; Reduction = 2.0 % points (≈21.1 % decrease)
C. New actual unemployment = 8.5 %; Reduction = 1.0 % points (≈10.5 % decrease)
D. New actual unemployment = 8.0 %; Reduction = 1.2 % points (≈12.6 % decrease)
Correct Answer
A
Correct Option:
New actual unemployment = 8.0 %; Reduction = 1.5 % points (≈15.8 % decrease)

About This Question

This is Gce Model Questions Vol1 2021 Economics Question 4. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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