A coastal town has seen its unemployment rate increase after a ferry operator closed in 2022. The local government is considering a grant for firms that hir...

Assessment: Economics 9214 | Paper 2 Mock 01 | Written Paper 2 Subject: Economics - 9214

Question 1 Report

A coastal town has seen its unemployment rate increase after a ferry operator closed in 2022. The local government is considering a grant for firms that hire former ferry workers.

(a) Which government objective would this grant mainly support? [1]
(b) Explain one likely benefit to the town if unemployment decreases. [1]

Answer Details

(a) The grant mainly supports the objective of lower unemployment, or full employment. [1]

(b) If unemployment falls, more residents receive wages, increasing household income. [1] This could also reduce spending on unemployment benefits or increase tax revenue.

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