Practise tracing unemployment effects on household spending, firms, tax revenue, welfare costs and skills, then comparing consequences by type, duration and worker group.
Assess whether the consequences of technological unemployment are likely to be more serious than those of cyclical unemployment.
OR
Use Table A: AO1 Knowledge and understanding and AO2 Analysis and Table B: AO3 Evaluation to mark candidate responses to this question.
AO1 and AO2 out of 8 marks. AO3 out of 4 marks.
Indicative content
Responses may include:
AO1 Knowledge and understanding and AO2 Analysis
Technological unemployment:
- Workers are unemployed as a result of a change in the pattern of production when machines replace labour in the productive process.
- New skills are required to use the capital equipment.
- Such unemployment is due to technical progress; if workers cannot move from one industry to another because of a lack of the required skills, they will become technologically unemployed.
Cyclical unemployment:
- Workers are unemployed because of a deficiency in aggregate demand, i.e. there are insufficient jobs in an economy.
- Whereas technological unemployment affects workers in particular industries, cyclical or demand-deficient unemployment affects the whole economy with job losses across a number of industries as firms reduce their output.
Focus of analysis should be the relative seriousness of the two types of unemployment. i.e. which is more serious and why.
(Up to 8 marks)
Level 1 responses will be assertive and lacking in explanations/mainly descriptive and/or mainly lacking in relevance to the question.
Level 2 responses may contain some inaccuracies and will be one-sided. Analysis will be explained at least in part and will be largely relevant to the question.
Level 3 responses will consider alternative policies/concepts etc. and will be balanced. Explanations of points raised will be offered and will be accurate and relevant to the question.
AO3 Evaluation
- Consideration of whether the consequences of technological unemployment are likely to be more serious than those of cyclical unemployment to reach a conclusion.
Accept all valid responses.
A one-sided response cannot gain any marks for evaluation. (Up to 4 marks)
4 (b)
AO1 Knowledge and understanding and AO2 Analysis
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AO3 Evaluation
OR