Date: _______________________

HKDSE Macroeconomics
Problem Set 4
35
Unemployment
Warming Up
1. CE2006 PI Q9(c)

Unemployment rate = (number of unemployed / total labour force) × 100% 1

The condition is the unemployed population increased. 1
If the percentage increase in the labour force is equal to the percentage increase in 2
the unemployed population, the unemployment rate remains unchanged.

2. DSE2012 PII Q6(a)

Losses to society caused by unemployment:

1. Loss of output 1
2. Loss of human capital 1
3. Political unrest / increase in crime rate 1

[Mark the FIRST TWO points only.] Max. 2

Exam Practice
3. CE2011 PI Q5

(a) Losses to society caused by unemployment:

1. Loss of output 1
2. Loss of human capital 1
3. Political unrest / increase in crime rate 1
[Mark the FIRST TWO points only.] Max. 2
(b) (167 500/3 512 600 + 167 500) x 100% 1
=4.55% 1

4. DSE PP PII Q6

Unemployment rate = (number of unemployed / total labour force) × 100% 1

Labour force increases because of importation of imported workers. 1
Since the imported workers do not replace domestic workers, unemployed 1
population remains unchanged.
As a result, the unemployment rate will decrease. 1

HKDSE Macroeconomics Problem Set 4 – Unemployment Page 1

Date: _______________________

5. DSE2013 PII Q11(b)(iii)

Unemployment rate = (number of unemployed / total labour force) × 100%

The total number of labour force will increase. 1
The total number of unemployed may also increase as some people may be 1
attracted to look for jobs but they may not be able to get one.
The effect on unemployment rate is uncertain as it depends on the percentage 1
increase in unemployed population and the percentage increase in the labour force.

6. DSE2015 PII Q5

Unemployment rate = (number of unemployed / total labour force) × 100% (4)

Since both total labour force and number of unemployed dropped by an equal
amount, the percentage decrease in the unemployed population is greater than the
percentage decrease in the total labour force, implying a reduction in the
unemployment rate.

7. DSE2016 PII Q6(a)(b)

(a) The unemployment rate = 200 000/(3 800 000+200 000)×100% = 5% (2)

(b) Loss caused by unemployment:

- loss of output
- loss of human capital @1,
- political and social unrest max: 3
- any other relevant point
[Mark the FIRST THREE points only.]

8. DSE2018 PII Q5(b)

Unemployment rate = (number of unemployed people / the total labour force) × (4)
100%
The number of unemployed people will not change while the labour force increase
as the retired staff is not in the labour force

HKDSE Macroeconomics Problem Set 4 – Unemployment Page 2

Date: _______________________

9. DSE2020 PII Q3(c)

Losses caused by unemployment:

- loss of output
- loss of human capital @1
- political and social unrest Max: 2
- any other relevant point
[Mark the FIRST TWO points only.]

Extra Questions
10. CE2000 PI Q7

Unemployment rate = (number of unemployed people / the total labour force) × 1

100%
Given the fact that the number of unemployed population increases but the 1
unemployment rate decreases, it implies that the labour force increases,
and the percentage increase in the labour force is greater than the percentage 2
increase in the unemployed population.

11. CE2003 PI Q6

Unemployment rate = (number of unemployed people / the total labour force) × 1

100%
An increase in the number of retired persons would not change the unemployed 1
population,
but this would reduce the size of labour force. 1
As a result, the unemployment rate will increase. 1

12. CE2007 PI Q8(b)(i)

Unemployment rate = (number of unemployed people / the total labour force) ×

100%
The total number of labour force will increase. 1
The total number of unemployed will also increase. 1
Since the amount of increase in total labour force is equal to the increase in
unemployed population, it implies that the percentage increase in the unemployed 1
population is greater than the percentage increase in labour force.
As a result, unemployment rate increases. 1

HKDSE Macroeconomics Problem Set 4 – Unemployment Page 3