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2.3 Economic performance

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Question 107

An economy is experiencing multiple labour market adjustments. Consider the following two scenarios:

  • Scenario XXX: Workers in a regional steel manufacturing town are laid off permanently as production moves abroad to lower-cost nations, leaving them with highly specialised skills that do not match local vacancies in the expanding service sector.
  • Scenario YYY: Construction workers are temporarily laid off nationwide due to a sharp decline in aggregate demand and a fall in real GDP during a macroeconomic downturn.

Which of the following correctly classifies the type of unemployment primary to Scenario X X\,X and Scenario YYY?

A

Scenario XXX: Structural unemployment; Scenario YYY: Cyclical unemployment

B

Scenario XXX: Frictional unemployment; Scenario YYY: Structural unemployment

C

Scenario XXX: Structural unemployment; Scenario YYY: Frictional unemployment

D

Scenario XXX: Cyclical unemployment; Scenario YYY: Classical (real wage) unemployment

Markscheme

2.3 Economic performance Questions

  1. A Level
  2. /Economics
  3. /2.3 Economic performance

327 exam-style questions on AQA A Level Economics 2.3 Economic performance, covering 2.3.1 Economic growth and the economic cycle, 2.3.2 Employment and unemployment, 2.3.3 Inflation and deflation, and 2.3.4 Possible conflicts between macroeconomic policy objectives. Each one has a worked solution and a mark scheme showing where the marks go.

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