An economy is experiencing a rise in its cyclical (demand-deficient) unemployment rate. Which of the following combinations of macroeconomic developments is the most likely cause of this increase?
An appreciation of the exchange rate alongside a rise in the marginal propensity to save (MPSMPSMPS)
A depreciation of the exchange rate combined with an increase in government expenditure (GGG)
A reduction in the basic rate of income tax alongside a sustained rise in business investment (III)
A decrease in the marginal propensity to import (MPMMPMMPM) accompanied by a reduction in interest rates
47 exam-style questions on Edexcel A A Level Economics 2.1.3 Employment and unemployment. Each one has a worked solution and a mark scheme showing where the marks go.