CAIE A-Level Economics 4.5 Unemployment Question Bank

Follow the point-based marking guidance at the top of this mark scheme and award:

up to 3 marks for AO1 Knowledge and understanding up to 3 marks for AO2 Analysis, up to 2 marks for AO3 Evaluation.

AO1 Knowledge and understanding (max 3 marks)

- A knowledge and understanding of what unemployment means in general. (1)

- One cause of frictional unemployment: it is temporary and at any point in time, there will be workers transferring between jobs; this could occur simply because an individual wishes to improve their job prospects and needs to spend time searching for a new job; there will be some unemployment while the transfer between jobs takes place. Searching may take some time if information about the availability of jobs is not very good. Frictional unemployment can include not only search unemployment, but also casual unemployment and seasonal unemployment. (1)

- One cause of technological unemployment is a type of structural unemployment that arises from the introduction of technology, when existing workers do not have the skills to operate the new technology; This is caused when developments in technology and working practices cause some workers to lose their jobs as they are replaced by capital investment. (1)

AO2 Analysis (max 3 marks)

An analysis of whether some element of frictional unemployment is inevitable, e.g. it would depend on the quality of information available about vacancies and the extent to which workers would be keen to change from one job to another. Is it always likely to occur? Candidates need to analyse the extent to which it is or is not inevitable.

AO3 Evaluation (max 2 marks)

Offers a valid judgement on whether some element of frictional unemployment is inevitable in an economy (1) to reach a conclusion. (1)

AO1 Knowledge and understanding

AO2 Analysis

AO3 Evaluation

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