Multiple choice

What is the main reason for occurrence of structural unemployment?

  1. Inflation

  2. Inclination towards heavy industry

  3. Shortage of raw material

  4. Inadequate production capacity
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Structural unemployment occurs when there is a mismatch between workers' skills and job requirements, often due to technological change, industrial restructuring, or inadequate production capacity. It's not caused by cyclical factors like demand fluctuations (which would cause cyclical unemployment) or raw material shortages. Inadequate production capacity means the economy cannot create enough jobs despite having willing workers.

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