WJEC A Level Economics
WJEC A Level Economics Unemployment Exam Questions
Free WJEC A Level Economics revision for Unemployment: what you need to know, common mistakes and exam-style questions with answers. Covers measurement and types of unemployment, the claimant count and ILO measure, causes, costs and demand side and supply side solutions.
Practise Unemployment with past papers
Once you have learnt this topic, find the Unemployment questions in real WJEC A Level Economics past papers and mark them with the mark scheme. Doing lots of real questions is the quickest way to learn how examiners ask about each idea.
About WJEC A Level Economics Unemployment
Unemployment is an A2 macroeconomic objective in WJEC Economics, structured in the specification around measurement and types, costs, causes and solutions. You need to know how the claimant count and the ILO Labour Force Survey measure work and their limitations, and distinguish cyclical, structural, frictional, seasonal and real wage unemployment. You then evaluate the costs of unemployment to individuals, government and the economy and match demand side and supply side solutions to the type of unemployment. Links to labour market flexibility, the minimum wage and the Phillips curve are useful. It is examined in A2 Units 3 and 4, often with labour market data for the UK or Wales.
What you need to know
- Measurement The ILO measure counts those without work who are available and actively seeking it, from the Labour Force Survey. The claimant count counts those claiming unemployment benefits and usually gives a lower figure because not all unemployed people claim.
- Rates and inactivity Unemployment rate = unemployed / economically active x 100. Economic inactivity covers people not working and not seeking work. Wales has historically had higher economic inactivity than the UK average, partly because of long-term sickness.
- Types Cyclical unemployment comes from a lack of AD; structural from long term decline of industries and skills mismatch; frictional from time spent between jobs; seasonal from seasonal demand; real wage (classical) from wages held above equilibrium.
- Costs Lost output and incomes, lower tax receipts and higher welfare spending, loss of skills and motivation (hysteresis), health and social costs, and regional decline where unemployment is concentrated.
- Demand side solutions Expansionary fiscal and monetary policy raise AD and reduce cyclical unemployment, but risk inflation near full capacity and increase borrowing.
- Supply side solutions Education and training, better job matching, reform of benefits, improved geographical and occupational mobility and regional investment reduce structural and frictional unemployment and lower the natural rate.
Common mistakes in Unemployment
- Calculating the unemployment rate using the total population. Divide by the economically active (labour force).
- Assuming the claimant count and ILO measure give the same figure. They measure different things, so the ILO figure is usually higher.
- Prescribing the same solution for every type of unemployment. Match demand side policy to cyclical and supply side policy to structural.
- Treating economically inactive people as unemployed. They are outside the labour force.
Try three Unemployment exam-style questions
1. Explain one limitation of the claimant count as a measure of unemployment. (2 marks)
Show the mark scheme answer
It only includes people claiming benefits; so unemployed people who are not eligible or choose not to claim, e.g. some young people or those with working partners, are not counted, understating unemployment.
2. In a region, 1.45 million people are employed and 60,000 are unemployed. Calculate the unemployment rate to one decimal place. (2 marks)
Show the mark scheme answer
Labour force = 1,450,000 + 60,000 = 1,510,000; 60,000 / 1,510,000 x 100 = 4.0%.
3. Evaluate supply side policies as a way of reducing unemployment. (15 marks)
Show the mark scheme answer
A strong answer would explain how training, improved mobility and benefit reform reduce structural and frictional unemployment and shift LRAS; evaluate time lags, costs, the need for jobs to exist (AD), possible lower living standards from benefit cuts, and that cyclical unemployment needs demand side action; reach a judgement based on the type of unemployment.
Unemployment FAQs
What does WJEC A Level Economics Unemployment cover?
It covers how unemployment is measured, the types and causes of unemployment, its costs and the demand side and supply side policies used to reduce it.
Which unit is Unemployment examined in?
It is A2 content, so it is examined in A2 Unit 3 (Exploring Economic Behaviour) and A2 Unit 4 (Evaluating Economic Models and Policies).
How do I link unemployment to other topics?
Connect cyclical unemployment to AD/AS and the economic cycle, the natural rate to the long run Phillips curve, and structural unemployment to labour market flexibility and supply side policies.
