2025HSCShort answer

Q23 (b)

2 marks

Question

Use the information to answer parts (b)−(d).
The following information refers to a hypothetical economy which has a Non-Accelerating Inflation Rate of Unemployment (NAIRU) of 5%.

Year	Participation rate	Unemployment rate
Year 1	66%	4.5%
Year 2	62%	5.9%

Outline ONE factor that may have changed the participation rate in this economy.

Try the question before revealing the answer.

Solution

Criteria	Marks
Outlines ONE factor that may have changed the participation rate in this economy	2
Provides some relevant information	1

Sample answer:

An increase in discouraged job seekers when they give up looking for work results in a smaller labour force and decreased participation rate.

Answers could include:

Increased enrolment in higher education
Growth in the over 65 population
Technological changes such as automation
Structural changes in the economy
Changes in policies such as taxation, welfare payments, parental leave and retirement age
Discouraged workers
Economic downturns.

Supplied marking guidance · human reviewed

Compare this with your working, not only your final sentence.

Syllabus alignment

Economic Issues

Growth, employment and inflationAnalyse growth, unemployment, inflation, distribution of income and environmental sustainability.

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