Question

In the following two parts:

1. Pick the right answer and fully explain why this is the correct answer
2. Fully explain why each of the other three options are not the correct answer. Provide a relevant example to enhance your answer.

Each Part must be no more than 160 words in total.”

1)A.“Which one of the following is not a cause of economic growth?”

a. reduction in the retirement age

b.advances in technology

c.improvements in education and training

d.the discovery of a new natural fuel

Maximum word count: 160 words

1)B.“After quitting his job as a quality control expert Jack is currently looking for a job. This is referred to as:”

a.Cyclical unemployment

b.Frictional unemployment

c.Structural unemployment

d.Classical unemployment

Maximum word count: 160 words

Answer 1

1) A. Reduction in the retirement age is not the cause of economic growth as there is no advancement and it will actually harm the economic growth rate of a country instead of letting it increase. For example if a person is told to retire at the age of 50 instead of at the age of 60, this will reduce the output that person generates for 10 years, which will harm the earnings and the power of consumption, the person will earn nothing and spend from his/her savings. Option b that is advances in technology is a cause of economic growth as people find innovative ways of using technology and increase in output through more industrial usage. Option c is also a cause of economic growth rate because people earn and learn more which leads to the next generation getting tried and tested innovative training and generating more output. Option d is also cause as discovery requires new technology and research which enhances economic growth rate as fuel efficiency increases. Thus a is the answer.

B. It is referred to as frictional unemployment as he is searching for a job and that gap is known as frictional unemployment wherein individuals search for a right match. Cyclical unemployment arises when overall demand in an economy falls, which leads to unemployment as people spend and consume less. While structural unemployment is when there is a huge technological change such as artificial intelligence overpowering the labour force and turning it redundant. Classical unemployment is when real wages are above the market clearing wage, this leads to more supply of labour as because of higher wages there is more supply and less demand. Thus looking at all these considerations, option b is the answer.