Gce Model Questions Vol1 2024 Economics Question 42

Practice objective / multiple choice question 42 from the 2024 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2024 Economics Objective / Multiple Choice Medium Difficulty
Question 42 GCE_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

In an economy the labour force is 12 million and the current unemployment rate is 10 %. Of the unemployed, 2 % of the labour force are frictionally unemployed and 3 % are structurally unemployed.\n(a) What is the natural rate of unemployment?\n(b) If cyclical unemployment disappears, what is the new overall unemployment rate?\n(c) By what percentage does total unemployment fall compared with the original rate?

Answer Options

Correct Answer A. Natural rate 5 %; new unemployment rate 5 %; unemployment falls by 50 %
B. Natural rate 7 %; new unemployment rate 7 %; unemployment falls by 30 %
C. Natural rate 4 %; new unemployment rate 4 %; unemployment falls by 60 %
D. Natural rate 6 %; new unemployment rate 6 %; unemployment falls by 40 %
Correct Answer
A
Correct Option:
Natural rate 5 %; new unemployment rate 5 %; unemployment falls by 50 %

About This Question

This is Gce Model Questions Vol1 2024 Economics Question 42. It is one of the objective questions from the 2024 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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