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Inflation and unemployment

Unit: Economics

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Practice CPA Economics Inflation and unemployment questions with detailed answers and explanations.

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August 2025

 5 Questions
Question 7c
​​Identify FOUR types of unemployment.


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Question 1
​​(a) Explain FOUR steps of the scientific method as applied in economic analysis.
 
(b) Explain SIX strategies that the government could implement to counter effects of climate change on agriculture.    
 
(c) (i)  Explain the term “central bank” of a country. 
 
(ii) State FOUR secondary functions of a central bank. 
 
(d) Highlight FOUR limitations of production possibility frontier curve.     


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Question 3d
​​Explain FOUR causes of structural unemployment.


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Question 5d
​​The rate of inflation in country X dropped from 9.6% in the month of January 2025 to 2.8% in the month of March 2025.  
 
Required: 
Assess SIX reasons why the standard of living of an average citizen in country X might not have changed over the past one year.  


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Question 6a
​ ​​With the aid of a diagram, explain the marginal efficiency of capital.


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April 2025

 2 Questions
Question 1c
​​Identify EIGHT policy measures that could be adopted by developing countries to encourage industrial development.


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Question 7b
​​Outline THREE causes of cost-push inflation.


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April 2024

 4 Questions
Question 2d
​​Summarise FOUR types of unemployment in least developed countries.


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Question 5b
​​Outline FIVE reasons why the high cost of living is a major policy issue in developing countries.


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Question 5d
​​Outline FIVE objectives of minimum wage legislation.


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Question 7c
​​Explain FOUR monetary policies that the central bank of a country might apply to control inflation.


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December 2023

 2 Questions
Question 3c
​​Outline FIVE reasons why urban unemployment is a major policy issue in developing countries.


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Question 7c
​ ​​Using an appropriate diagram, explain how a fiscal policy may be used to control a deflationary gap in an economy.


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August 2023

 3 Questions
Question 3a
​​(i) Explain the term “wage control”. 

(ii) Summarise FIVE consequences of wage control by the government in your country.


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Question 1b
​​Explain FOUR types of unemployment.


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Question 4d
​​Enumerate FIVE roles of trade unions in an economy.


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April 2023

 1 Questions
Question 3c
​​Outline SEVEN demerits of inflation targeting.


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December 2022

 3 Questions
Question 5c
​​Enumerate FOUR factors that could determine the effectiveness of trade unions.


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Question 5a
​​Explain the following types of inflation:

(i) Cost push.

(ii) Credit.

(iii) Demand pull.


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Question 2d
​​Identify FIVE reasons why unemployment is a major policy issue in developing countries.


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August 2022

 1 Questions
Question 7b
​​Highlight six policy measures that may be put in place to combat unemployment in developing countries.


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April 2022

 1 Questions
Question 7b
​​Citing real life examples, distinguish between the following types of unemployment: 

(i) "Seasonal unemployment" and "casual unemployment".

(ii) "Disguised unemployment" and "unproductive unemployment".


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Pilot December 2021

 3 Questions
Question 7b
​​Suggest the possible remedy measures to contain unemployment crisis in developing countries.


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Question 7a
​​Outline the main causes for the rise in the unemployment levels in developing countries.


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Question 6c
​​Citing reasons, suggest why rising inflation is a major cause of concern in developing countries.


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December 2021

 3 Questions
Question 7b
​​Explain four causes of a demand-pull inflation in an economy.


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Question 7a
​​(i) Define the term "inflation targeting".
(ii) State four disadvantages of inflation targeting in a country.


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Question 4a
​​Citing an example, explain the term "hidden unemployment".


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May 2021

 1 Questions
Question 4c
​​Assess seven reasons why developing countries are concerned about the high rate of unemployment in their countries.


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November 2020

 1 Questions
Question 4b
​​Differentiate between "seasonal unemployment and frictional unemployment.


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November 2019

 1 Questions
Question 5d
​​With the aid of a well labelled diagram, explain the trade-off between inflation and unemployment level,


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May 2019

 2 Questions
Question 5a
​​Differentiate between "demand deficient unemployment" and "disguised unemployment" as used in economics.


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Question 6b
​​Describe factors that determine the terms of trade in a country.


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November 2018

 2 Questions
Question 6a
Suggest measures that developing countries could adopt to curb against high levels of urban unemployment.


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Question 7a
(i) Explain the term "hyperinflation" as used in economics. 
(ii) With the help of a diagram, describe demand pull inflation. 
(iii) Highlight causes of demand pull inflation in an economy.


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May 2018

 3 Questions
Question 7a
​​ Highlight five negative effects of unemployment in an economy


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Question 4c
Discuss five ways in which inflation might cause unemployment in an economy


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Question 1a
Discuss five negative effects of inflation in an economy.


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May 2017

 1 Questions
Question 7c
Summarise nine reasons why unemployment is a major policy issue in developing countries


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November 2016

 1 Questions
Question 6c
Suggest five policy measures that could be adopted to reduce the level of unemployment in a developing country


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May 2016

 2 Questions
Question 7a
​​Summarise five causes of inflation in developing countries.


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Question 2a
​​Differentiate between the following sets of terms as used in economics:

(i) "Structural unemployment" and "keynesian unemployment".

(ii) "Narrow money" and "broad money". 


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November 2015

 1 Questions
Question 6a
​​Explain four effects of inflation on the functions of money.


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Pilot September 2015

 4 Questions
Question 6c
​ ​​Using the Phillips curve, explain the relationship between unemployment and inflation.


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Question 6b
​​ Explain three types of unemployment.


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Question 6a
​​Most developing countries experience deficits in their balance of payments.

Explain the various methods that could be used by these countries to correct deficits in their balance of payments. 


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Question 4c
​​ Briefly explain the effects ofhigh levels of inflation in an economy.


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