Economics ยท General Awareness

Unemployment and Labor Economics

1,013 Questions

Understand economic fundamentals through these questions on unemployment and labor economics. Topics cover the natural rate of unemployment, labor force participation, and official definitions of joblessness. This material is tailored for civil services and economics exam preparation.

Natural rate of unemploymentLabor force participationCauses of job displacementDefinition of unemploymentUnemployment reduction methodsGig economy impacts

Unemployment and Labor Economics Questions

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

Frictional unemployment is a ______ phenomenon.

  1. permanent

  2. temporary

  3. long-term

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Frictional unemployment is a temporary state that exists as long as there is a dynamic labor market where people move between jobs. It is not a permanent condition for the individual.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

Casual unemployment is common in____.

  1. construction

  2. catering

  3. agriculture

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Casual unemployment is prevalent in sectors like construction, catering, and agriculture, where work is often project-based, seasonal, or dependent on daily demand rather than permanent employment.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

Frictional unemployment exists in an economy due to_____.

  1. lack of trained employees

  2. imperfect information about availability of manpower and the opportunities

  3. ceiling on production levels by manufactures

  4. decrease in demand for products
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Frictional unemployment occurs because it takes time for job seekers to find employers and for employers to find suitable candidates due to imperfect information in the labor market.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

A situation of employment in which a person is apparently employed but contribution to the production is almost nil is called _________ unemployment.

  1. structural.

  2. chronic.

  3. disguised.

  4. cyclical.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
A situation of employment in which a person is apparently employed but contribution to the production is almost nil is called disguised unemployment. This is a case of marginal productivity of labour being zero and is generally found in the agricultural sector.
Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

In which type of unemployment would a shift in surplus labour from one sector to another, will lead to an increase in productivity and the national output?

  1. structural unemployment.

  2. frictional unemployment.

  3. disguised unemployment.

  4. cyclical unemployment.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Structural unemployment involves a mismatch in the economy. Moving surplus labor from a low-productivity sector (like traditional agriculture) to a more productive sector (like industry) increases overall output.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

Which type of unemployment arises due to changes in the regional and occupational patterns of job vacancies, which does not match the profile of a the existing workers?

  1. Disguised unemployment.

  2. Frictional unemployment.

  3. Structural unemployment.

  4. Cyclical unemployment.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Structural unemployment occurs when there is a fundamental shift in the economy, such as changes in technology or consumer demand, that makes the skills of existing workers obsolete.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

When industries offer employment for only a certain period of time in a year, it leads to ______ unemployment.

  1. structural

  2. frictional

  3. casual

  4. seasonal
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Seasonal unemployment occurs when industries or occupations are only active during specific times of the year, such as agriculture during harvest or tourism during peak seasons.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

When the economy is not able to absor the increasing number of people coming to labour market in search of jobs, it is a case of ______ unemployment.

  1. frictional

  2. structural

  3. casual

  4. seasonal
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Structural unemployment is a long-term issue where the economy's capacity to create jobs fails to keep pace with the growth of the labor force, often due to lack of capital or infrastructure.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

You are the factory owner and have given employment to 400 workers if 10 workers are retrenched by you without loss of production then this situation be described as ______.

  1. open unemployment

  2. disguised unemployment

  3. frictional unemployment

  4. seasonal unemployment
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Disguised unemployment exists when removing workers does not reduce total production. If 10 workers can be removed without affecting the output of 400, those 10 were effectively redundant.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

When people engaged in certain work or activities remain unemployment during the off-season, it leads to ______ unemployment.

  1. structural

  2. frictional

  3. seasonal

  4. casual
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Seasonal unemployment occurs when workers are unemployed during the off-season because their specific job is not required during that time of year.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

Structural unemployment results due to____.

  1. change caused by the introduction of new machines, labour saving devices and improvement in method of production

  2. change caused by recessionary and depressionary phases of the economy

  3. change caused by high population growth, primitive state of technology, low capital formation and vicious circle of poverty etc.

  4. change caused by a decline in demand for production in particular industry and consequent disinvestment and reduction in its manpower requirement
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Structural unemployment is caused by a decline in demand for a specific industry's products, leading to disinvestment and a permanent reduction in the need for labor in that sector.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

When there is a decline in demand for production in a particular industry, it leads to ______ unemployment.

  1. structural

  2. frictional

  3. casual

  4. seasonal
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When demand for a product falls, the industry shrinks, leading to structural unemployment as workers in that industry are no longer needed.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

When manual effort is replaced by mechanical effort and thereby workers are rendered jobless, it is called as ______ unemployment.

  1. frictional

  2. structural

  3. technological

  4. seasonal
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Technological unemployment occurs when machines or new technologies replace manual labor, rendering those workers jobless because their skills are no longer required.

Multiple choice economics unemployment in india types of unemployment unemployment and measures to remove employment and unemployment in india - problems and policies

Cyclical unemployment is a ______ phenomenon.

  1. permanet

  2. temporary

  3. long-term

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Cyclical unemployment is tied to business cycles - it rises during recessions and falls during expansions. Since economies move through cycles, this unemployment is temporary, not permanent or long-term. It disappears when the economy recovers.