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3 marksClassical Models of the Macroeconomy

CAPE Economics Unit 2 · 2008 · Paper 2 · Question 2(a)(iii)

Based on the classical model where equilibrium can still feature some unemployment.

On the same graph, show disequilibrium unemployment.

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Other parts of this question

  1. 2(a)(i)State the level of unemployment referred to in the statement that some amount of unemployment still exists when the economy is in equilibrium.[3 marks]
  2. 2(a)(ii)Draw a graph showing equilibrium employment.[9 marks]
  3. 2(b)Explain why disequilibrium employment exists according to the classical model.[5 marks]
  4. 2(c)Explain how, according to the classical view, the economy goes back to equilibrium employment from a position of disequilibrium.[10 marks]
  5. 2(d)Describe FOUR types of unemployment.[20 marks]

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