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Pearson Edexcel IAL Economics 2.3.1.3c effects of unemployment on: • con

Practise evaluating how unemployment affects workers, firms, public finances, resource use and wider economic performance.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
AS

Exam points

  • explain how higher unemployment can reduce tax revenue and raise welfare spending
  • evaluate effects on workers, including income loss, skills loss and bargaining power
  • link unemployment to spare capacity, lower output and movement inside the PPF

2.3.1.3c - effects of unemployment on: • consumers • firms • workers • public finances • resource question 1

[Maximum number: 1]

The unemployment rate in Sri Lanka increased from 5.2\% in 2021 to 6.7\% in 2022.
Which one of the following is the most likely effect of this increase in the unemployment rate?

A

An increase in national happiness in Sri Lanka

B

An increase in the level of profits for firms in Sri Lanka

C

A decrease in tax revenues for Sri Lanka's Government

D

A decrease in welfare payments by Sri Lanka's Government

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