2 marks

1. define labour force

2. define labour force participation rate

4-6 marks

1. explain the different patterns of unemployment in an economy

4-8 marks

1. what are the different causes of unemployment

2. explain the different types of unemployment
3. explain the measures to calculate the rate of unemployment in an economy and
discuss advantages and disadvantages
4. explain how unemployment can be measured using claimant count method discuss the
advantages and disadvantages
5. explain what is LFS (labour force survey) and discuss the advantages and
disadvantages of using it as a measure to calculate unemployment
6. discuss the policies and effectiveness of the policies used by a government to
control unemployment
7. discuss the causes and consequences of unemployment in an economy

6.a. one of the macroeconomic aims of the government is to reduce unemployment in

an economy, for this the government may opt for the following policies
Firstly, the government may start with the expansionary policies under the demand
side policies the goernment may reduce taxes and increase public expenditure, by
reducing taxes people will have more disposable income, this will increase spending
which increasing agregate demand, if demand increases suppliers may have to
increase the output which may result in employing more people thereby increasing
the levels of employment. If the government increases public expenditure this may
result in more jobs being created directly in an economy. Under the monetary
policies the government may cut down the interest rates which encourages borrowing
and spending in an economy, this will increase the agregate demand and boost the
employment levels in the country. Lower interest rates will also encourage
investors to borrow more. More investments may again lead to higher levels of
employment. The government may also come up with varied schemes which increases
lending in an economy this may also result in increased spending and agregate
demand creating more job opportunities.
Under the supply side policies the government may cut on unemployment benefits.
This may force people to start looking for jobs thereby increasing the employment
levels in an economy. Secondly, the government may put a control on imports, by
these import controls there may be extra demand created which may lead to more jobs
created domestically. The government may also provide grants and subsidies so that
firms can locate in those areas of high unemployment so that people will be
employed.
The above explains how expanionary demand side and supply side policies may result
in not being effective as expansionary fiscal policies may result in higher
inflationary pressure and higher public expenditure may result in opportunity cost
to the government. Expansionary supply side policies will result in opportunity
cost to the government if the government gives grants and subsidies to particular
forms. Cutting unemployment benefits may end up in poverty and import controls on
raw materials may lead to closure of domestic firms

2-4 marks

1. explain what is meant by demand pull/cost push inflation (if 4 marks explain
using graphs)
6 marks

1. how is inflation calculated using RPI/CPI

2. discuss the limitations of using RPI/CPI as a measure to calculate inflation
3. explain what are the causes of inflation
4. discuess the consequences of inflation in an economy
5. what are the causes of deflation

8 marks

1. how is inflation calculated using RPI/CPI and discuss the limitations

2. discuss the policies and the effetiveness of policies a government may adopt to
control infaltion in an economy
3. what are the causes and consequences of deflation
4. discuss the policies and the effectivness of policies to tackle deflation