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

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.

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

When 5 workers are sufficient and 7 workers are actually employed, then the number of disguised unemployed is___.

  1. 5

  2. 7

  3. 2

  4. 12
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

If 5 workers are sufficient to produce the output, but 7 are employed, the 2 extra workers are redundant. Their marginal productivity is effectively zero, making them the disguised unemployed.

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

Disguised Unemployment in India is maximum in___.

  1. agricultural sector

  2. secondary sector

  3. tertiary sector

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

In India, the agricultural sector is characterized by a high density of labor relative to land and capital, leading to significant disguised unemployment where family members work on the same plot of land without increasing total yield.

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

Disguised employment refers to____.

  1. a situation where there are more employees and some having zero marginal productivity

  2. less employees plus zero marginal productivity

  3. both of the above

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

Disguised unemployment is defined by a situation where more people are employed than necessary, meaning the marginal productivity of the additional workers is zero.

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 his 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

When a person appears to be working but their contribution to total production is nil, they are considered disguisedly unemployed.

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

Which of these explains Disguised Unemployment?

  1. When manual effort is replaced by mechanical effort and thereby workers are rendered jobless.

  2. When extra workers are employed and their removal will not affect the volume of total output.

  3. When these is a deadline in demand for production in particular industry.

  4. When industries offer employment for only a certain period of time in a year.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Disguised unemployment means extra workers are employed and removing them doesn't reduce output - their marginal productivity is zero. Option A describes technological unemployment, C is structural (with typo 'deadline' for 'decline'), and D describes seasonal unemployment disguised unemployment, workers appear employed but add nothing.

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

Which of the following statements is false?

  1. Minimization of unemployment rate is an accepted goal of macroeconomic policy.

  2. Business Cycle have no effect on unemployment rates.

  3. During a recession, when output falls, the demand for labour falls and the unemployment rate increases.

  4. During a boom, the unemployment rate falls as the demand for labor increases.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Business cycles have a significant effect on unemployment rates. During a recession, cyclical unemployment rises, and during a boom, it falls, making the statement that they have no effect false.

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

Which of these explains technological Unemployment?

  1. When manual effort is replaced by mechanical effort and thereby workers are rendered jobless.

  2. When extra workers are employed and their removal will not affect the volume of the total output.

  3. When these is a decline in demand in production in particular industry.

  4. When industries offer employment for only a certain period of time in a year.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Technological unemployment is specifically caused by the replacement of human labor with machines or automated processes.

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

When unemployment tends to be long-term feature of a country, it is called ______ unemployment.

  1. open

  2. disguised

  3. chronic

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

Chronic unemployment refers to a long-term, persistent state of unemployment that affects an economy over an extended period.