Cambridge IGCSE · Economics (0455)

Employment and unemployment: Practice Questions

5 multiple-choice questions marked as you go, and 4 written questions with worked solutions. All on Employment and unemployment.

9 questions24 marksFree, no account

Question 1

1 mark

Which type of unemployment occurs when there is a lack of total demand in the economy, typically during a recession?

Question 2

1 mark

A large decline in the demand for locally produced steel due to cheaper foreign imports results in long-term job losses for steelworkers who do not have skills for other industries. What type of unemployment is this?

Question 3

1 mark

Which combination of changes is most likely to result in a decrease in a country's unemployment rate?

Question 4

1 mark

A person leaves their current job and spends three weeks looking for a new position with better working conditions. Which term describes this situation?

Question 5

1 mark

A country has the following labour market data:
Total population: \( 60 \) million
Number of people of working age: \( 40 \) million
Number of people in the labour force: \( 30 \) million
Number of people currently employed: \( 27 \) million
What is the unemployment rate for this country?

Question 6

2 marks

Calculate the unemployment rate for an economy where the labour force is \( 20 \) million and the number of unemployed people is \( 1.2 \) million.

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Question 7

4 marks

Explain two reasons why the proportion of workers employed in the tertiary sector typically rises as an economy becomes more developed.

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Question 8

5 marks

In an economy with a working-age population of 20 million, the labour force is 15 million, and 1.5 million people are currently out of work but actively seeking employment. Calculate the unemployment rate using the formula \( \frac{\text{Unemployed}}{\text{Labour Force}} \times 100 \) and explain how a sudden increase in the participation rate would affect this figure.

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Question 9

8 marks

An economy has a working-age population of \( 80 \) million. Of these, \( 50 \) million are in the labour force. Currently, \( 46 \) million people are employed. The government is concerned about a rise in structural unemployment due to the decline of the coal mining industry and a rise in cyclical unemployment due to a global recession.

(a) Calculate the unemployment rate for this economy and identify the number of people who are economically inactive.
(b) Analyse the differences between structural unemployment and cyclical unemployment, including a specific cause for each based on the text.
(c) Discuss whether or not supply-side policies are the most effective way for a government to reduce unemployment.

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