QUESTION 76 (5 marks)
Flexible work and childcare initiatives enable 12 000 additional people to join the labour force. Employers have 8000 suitable vacancies, and all are filled by these entrants. Explain the immediate employment and unemployment effects and one longer-run supply benefit.
Practice marking scheme
Answer
Employment rises by 8000; measured unemployment rises by 4000 initially; effective labour supply can increase capacity.
Working
All 12 000 entrants begin looking and are available. Filling 8000 vacancies leaves 4000 unemployed, despite stronger employment. Greater participation can expand labour supply and productive capacity; childcare and matching quality determine sustained gains. A temporary unemployment increase need not indicate policy failure when previously inactive people become economically active.
Marking criteria
- Accounts for the 8000 employed and 4000 unemployed entrants. [2 marks]
- Explains participation and the interpretation of the unemployment count. [2 marks]
- Explains a qualified capacity benefit. [1 mark]
Practice question aligned to the current QCAA syllabus; review the worked solution and marking criteria.
View the QCAA syllabusCompare your working with the guide above.