Economics · May / June 2022 · Paper 11 · Question 5

A government retrains unemployed industrial workers to increase employment opportunities. The policy may have adverse effects on other government macroeconomic aims. What illustrates this situation?

1. ABetter skilled workers may increase productivity and improve economic growth.
2. BIncreased wage-earning capacity may lead to demand-pull inflation.
3. CMore employed workers may reduce government expenditure on benefit payments.
4. DNear full employment may result in a more stable balance of payments.

As printed in the paper