An employment programme reduces unemployment in an economy. Table 1 shows labour market and government finance data before and after the programme.
| Measure | Value |
|---|---|
| Number unemployed before the programme | 1.75 million |
| Number unemployed after the programme | 1.40 million |
| Average annual unemployment benefit per unemployed person | £6,800 |
| Average annual income tax paid per worker | £4,200 |
Assume that all the people leaving unemployment move into paid work and that the average figures shown apply to each of these people.
Calculate the total annual improvement in the government's finances resulting from the fall in unemployment. Give your answer in £bn.
189 exam-style questions on AQA GCSE Economics 2.2 Government objectives, covering 2.2.1a The main economic objectives, 2.2.1b Conflicts between government objectives, 2.2.1c Other objectives and ethical considerations, 2.2.2a The significance of economic growth, 2.2.2b Causes, costs, benefits and policies for growth, 2.2.2c GDP measures and calculations, 2.2.3a Measuring employment and unemployment, 2.2.3b Types and causes of unemployment, 2.2.3c Consequences and policies for unemployment, 2.2.4a What inflation is, 2.2.4b Measuring inflation with the CPI, 2.2.4c Causes, consequences and control of inflation, 2.2.5a Balance of trade and balance of payments, 2.2.5b Current account surpluses and deficits, 2.2.5c Policies to influence the balance of payments, 2.2.6a Income and wealth inequality in the UK, 2.2.6b Causes and consequences of inequality, and 2.2.6c Redistributing income and wealth. Each one has a worked solution and a mark scheme showing where the marks go.