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Edexcel A-Level Economics AS 2.3.1 3c Effects of Unemployment on Consumers Firms Workers Public Finances Resource Questions

Practise analysing and evaluating how unemployment affects consumers, firms, workers, public finances, resource use and wider society.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
AS

Exam points

  • analyse how lost income and confidence reduce consumption, living standards and aggregate demand
  • analyse worker effects through underemployment, deskilling, weaker job prospects and bargaining power
  • explain how lower consumer demand can reduce firms' profits while spare labour may lower future wage costs
  • explain how lower income, spending and profit taxes plus higher welfare or training costs worsen public finances
  • link unused labour to spare capacity, lost potential output, a wider output gap and movement inside the PPF

Edexcel A-Level Economics AS 2.3.1 3c Effects of Unemployment on Consumers Firms Workers Public Finances Resource Questions 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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