Neco 2020 Economics Question 39

Practice objective / multiple choice question 39 from the 2020 Neco Economics examination.

Neco 2020 Economics Objective / Multiple Choice Medium Difficulty
Question 39 NECO • 2020 • ECONOMICS • objective

In Country Y the labour force is 8 million and the unemployment rate is 12 %. Of the unemployed, 40 % are structural, 30 % are frictional and the remainder are cyclical. The government expects real GDP to grow by 5 % next year, and historically a 1 % increase in GDP reduces cyclical unemployment by 0.5 percentage points. Assuming structural and frictional unemployment remain unchanged, what will be the new unemployment rate after the growth, and how many people will move from unemployment to employment?

Answer Options

A. Unemployment rate = 10.0 %; 100,000 people gain employment
B. Unemployment rate = 9.0 %; 250,000 people gain employment
Correct Answer C. Unemployment rate = 9.5 %; 200,000 people gain employment
D. Unemployment rate = 11.5 %; 50,000 people gain employment
Correct Answer
C
Correct Option:
Unemployment rate = 9.5 %; 200,000 people gain employment

About This Question

This is Neco 2020 Economics Question 39. It is one of the objective questions from the 2020 Neco Economics examination.

Difficulty level: Medium .

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