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Economics (AS & A Level) · Oct / Nov 2021 · Paper 33 · Question 22

9708Employment/unemployment

Governments have a range of policy options available to them to reduce unemployment. Which statement is correct?

  1. AA government cannot reduce seasonal unemployment.
  2. BChanging interest rates is the best way a government can reduce the natural rate of unemployment.
  3. CChanging the exchange rate will not reduce demand-deficient unemployment.
  4. DSupply-side policies can be used by a government to reduce frictional unemployment.

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Correct answer: D. Supply-side policies can be used by a government to reduce frictional unemployment.

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