CAIE A-Level Economics 9.3.4 Natural Rate of Unemployment

CAIE A-Level Economics 9.3.4 Natural Rate of Unemployment
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise defining the natural rate as equilibrium unemployment including frictional and structural elements and evaluating skills, mobility, information, benefits and labour…

How this is tested

  • distinguish the natural rate from cyclical unemployment and include frictional and structural components
  • explain how training, mobility and vacancy information reduce skill or location mismatch
  • predict how generous benefits or stronger wage rigidities may raise equilibrium unemployment

Question 15

[Maximum number: 1]

Which policy is most likely to lead to a reduction in the natural rate of unemployment?

A

an increase in government expenditure on goods and services

B

an increase in government expenditure on training schemes to address skill shortages

C

an increase in the period when the unemployed are eligible for welfare benefits

D

an increase in the minimum wage