Economics ยท General Awareness

Unemployment and Labor Economics

1,018 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

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.

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

Technological unemployment is caused by____.

  1. introduction of new machinery

  2. improvement in method of production

  3. use of labour-saving devices

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

Technological unemployment is caused by any advancement that reduces the need for human labor, including new machinery, better production methods, or labor-saving devices.

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 an unemployment attributed to recession, it is called as ______ unemployment.

  1. cyclical

  2. structural

  3. technological

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

Cyclical unemployment is directly linked to the business cycle, specifically the contractionary phase known as a recession. When aggregate demand drops, firms reduce production and lay off workers.

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

Structural unemployment is due to____.

  1. inflationary condition

  2. heavy industry bias

  3. shortage of raw materials

  4. inadequate productive capacity
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Structural unemployment occurs when there is a fundamental mismatch between the skills of the labor force and the requirements of the economy. A heavy industry bias often leads to this when the economy shifts away from those sectors.

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

Cyclical unemployment can be overcome by____.

  1. increasing total expenditure and pushing up effective demand

  2. easy-money policy

  3. deficit financing

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

Cyclical unemployment is caused by a lack of aggregate demand. Governments and central banks use expansionary fiscal policies (like deficit financing) and monetary policies (like easy-money policy) to stimulate demand and reduce this unemployment.

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

When workers tend to be replaced by machines and technological improvements, it is known as____.

  1. industrial unemployment

  2. technological unemployment

  3. chronic unemployment

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

Technological unemployment occurs when advancements in technology or the introduction of labor-saving machinery replace human workers in the production process.

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 takes place in the economy when there is a business downturn?

  1. Frictional unemployment.

  2. Structural unemployment.

  3. Cyclical unemplyment.

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

Business downturns create cyclical unemployment because it follows the economic cycle. Frictional is between jobs, structural is from industry decline or mismatch, and 'unstructured' is not an economic term. Note: option C has typo 'unemplyment'.

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

In disguised unemployment marginal productivity of labour becomes___.

  1. zero

  2. one

  3. infinite

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

Disguised unemployment occurs when more people are working than are necessary for the job. Because the extra workers do not add to the total output, their marginal productivity is zero.