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Economics (AS & A Level) · Oct / Nov 2025 · Paper 33 · Question 18

9708Unemployment

Which combination of policies is most likely to reduce cyclical unemployment but might increase frictional unemployment?

  1. Adecrease direct taxes, decrease unemployment benefits
  2. Bdecrease direct taxes, increase unemployment benefits
  3. Cincrease direct taxes, decrease unemployment benefits
  4. Dincrease direct taxes, increase unemployment benefits

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Correct answer: B. decrease direct taxes, increase unemployment benefits

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