Date: _______________________

HKDSE Macroeconomics
Problem Set 4 33
Unemployment
Warming Up
1. CE2006 PI Q9(c)
In the summer of last year, the growing business of many retail shops led to an increase in the
employed population in Hong Kong. However, the unemployment rate during the same period of
time remained unchanged.

Explain why the unemployment rate can still remain unchanged in spite of an increase in the
employed population.
(4 marks)

2. DSE2012 PII Q6(a)

State TWO losses to society caused by unemployment.
(2 marks)

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Exam Practice
3. CE2011 PI Q5
(a) Give TWO losses to society caused by unemployment.
(2 marks)
(b) Study the following employment data on Hong Kong in the period of June 2010 to August
2010.
Number of Persons
Employed persons 3 512 600
Underemployed persons 70 500
Unemployed persons 167 500
Calculate the unemployment rate in the above period.
(2 marks)

4. DSE PP PII Q6
The following is a news report about Economy A.
Skilled construction workers are in great demand after the launch of the construction project of
a new high-speed railway system. A government official has announced the introduction of a
labour importation scheme to meet the need for skilled workers.

Suppose the imported workers do not replace any of the domestic workers. Explain how the
unemployment rate will be affected by the scheme.
(4 marks)

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5. DSE2013 PII Q11(b)(iii)

The government has launched the “Work Incentive Transport Subsidy Scheme”. Applicants must
meet the monthly income and asset limits of the household (e.g. for a single person, the monthly
income cannot exceed $7 300 and the assets cannot exceed $72 000) and work no less than 72
hours per month in order to apply for a subsidy of $600 per month.

Discuss the effects of the scheme on the unemployment rate.

(3 marks)

6. DSE2015 PII Q5
Macau has developed rapidly in recent years and some workers in Hong Kong have been attracted
to work there. Suppose the number of job positions in Hong Kong is constant. What would be the
effect of the above phenomenon on the unemployment rate in Hong Kong? Explain your answer.
(4 marks)

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7. DSE2016 PII Q6(a)(b)

Below are the employment data of a country.

Employed population 3 800 000

Underemployed population 800 000
Unemployed population 200 000

(a) Calculate the unemployment rate of the country.

(2 marks)
(b) Suggest THREE losses to the society caused by unemployment.
(3 marks)

8. DSE2018 PII Q5(b)

During peak flu seasons, there is not enough medical staff in public hospitals in Hong Kong.
In order to relieve the pressure of the medical staff, the government plans to recruit retired medical
staff to re-join the public hospitals. Explain how the measure would affect the unemployment rate
in Hong Kong.
(4 marks)

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Extra Questions
9. CE2000 PI Q7
A certain government announces that the unemployment rate has dropped but the number of
unemployed has increased. Explain why the number of unemployed can increase despite a fall in
the unemployment rate.
(4 marks)
10. CE2003 PI Q6
Suppose a number of civil servants retire under the government’s voluntary retirement scheme.
Explain whether this will increase the unemployment rate in Hong Kong.
(4 marks)
11. CE2007 PI Q8(b)(i)
The universities in Hong Kong do not only admit local students. Since last year, these universities
have begun to admit a large number of top-quality Mainland students. Suppose all students pay
the same tuition fees.

Suppose these top-quality Mainland students stay and work in Hong Kong after their graduation
and the total number of job positions in Hong Kong remains unchanged.

Explain how this situation would affect the unemployment rate of Hong Kong.
(4 marks)

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