O-LevelEconomicsGovernment and the macroeconomy2281/11 · May/June 2022 · Q51 Mark
A government retrains unemployed industrial workers to increase employment opportunities. The policy may have adverse effects on other government macroeconomic aims. What illustrates this situation?
ABetter skilled workers may increase productivity and improve economic growth.
BIncreased wage-earning capacity may lead to demand-pull inflation.
CMore employed workers may reduce government expenditure on benefit payments.
DNear full employment may result in a more stable balance of payments.
✓ Correct answer
B: Increased wage-earning capacity may lead to demand-pull inflation.
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