Economics · 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 social science employment: growth, informalisation and other issues employment - trends and structure workers and employment sources of income

Which of the following is false?

  1. Self-employed and casual wage labourers are found more in rural areas than in urban areas

  2. Men are engaged in salaried employment in greater proportion than women

  3. Casual wage work engages the least workforce

  4. Salaried employment engages the least workforce
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
When we compare the distribution of workforce in rural and urban areas we notice that the self-employed and casual wage labourers account for a total of 93% of the workforce in rural areas as compared to 60% in urban areas.
When it comes to regular salaried employment, men are found to be so engaged in greater proportion. They form 18 per cent whereas women form only 8 per cent of the workforce.
Casual wage labourers account for 33 per cent of India’s workforce. Regular salaried employees form 15% of the workforce, which is the least.
Multiple choice social science employment: growth, informalisation and other issues employment - trends and structure workers and employment sources of income

Which of the following type of employment is found in India?

  1. Structural employment

  2. Quasi employment

  3. disguised employment

  4. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

India faces various types of employment challenges, including structural, disguised (common in agriculture), and other forms, making 'All of these' the correct choice.

Multiple choice social science employment: growth, informalisation and other issues employment - trends and structure workers and employment sources of income

Percentage of people in non-working age group is known as ________.

  1. working - non working ratio

  2. dependency rate

  3. non-dependency rate

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

The dependency rate is the ratio of people in the non-working age groups (children and elderly) to those in the working-age group.

Multiple choice evs who will do this work? cleanliness let's clean together personal and public cleanliness

Why do people choose cleaning jobs?

  1. They are illiterate.

  2. They are unemployed.

  3. They like to clean surrounding.

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

People choose cleaning jobs because they are illiterate, sometimes due to their household conditions they have to choose as they are unemployed. Some people like to clean surroundings or live to be healthy or clean life so they choose.

So, the above all statement is correct.

Multiple choice economics employment: growth, informalisation and other issues unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Match the following:

List - I(Type of Unemployment) List - II(Associated Fact)
A. Frictional Unemployment 1. Non-availability of job
B. Structural Unemployment 2. Marginal productivity is zero
C. Seasonal Unemployment 3. Use of obsolete technology for production
D. Disguised Unemployment 4. Population pressure on land
  1. $4, 2, 1, 3$
  2. $1, 3, 4, 2$
  3. $4, 3, 1, 2$
  4. $1, 2, 4, 3$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Frictional unemployment relates to job searching (1); Structural unemployment relates to technological changes (3); Seasonal unemployment relates to population pressure/seasonal cycles (4); Disguised unemployment relates to zero marginal productivity (2).

Multiple choice economics employment: growth, informalisation and other issues unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Frictional unemployment is consistent with full employment.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Frictional unemployment is an unemployment situation where people are not unemployed owing to not getting any job but they are unemployed because they are searching for a new job or they are getting transferred from one employment to the other. Frictional unemployment remains consistent with full employment if it is at a rate of 3-4% of the full employment. 

Multiple choice economics employment: growth, informalisation and other issues unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Frictional unemployment rate of ________ is consistent with full employment level, as per the experience of developed countries.

  1. 3 to 4%

  2. 5 to 8%

  3. upto 2%

  4. 10 to 15%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Frictional unemployment is an unemployment situation where people are not unemployed owing to not getting any job but they are unemployed because they are searching for a new job or they are getting transferred from one employment to the other. Frictional unemployment remains consistent with full employment if it is at a rate of 3-4% of the full employment. 

Multiple choice economics employment: growth, informalisation and other issues unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

The equilibrium below full employment level is termed as _____________.

  1. underemployment equilibrium

  2. over employment equilibrium

  3. aggregate disequilibrium

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

When the aggregate spending is not sufficient to produce an adequate level of output which requires full employment of available resources then it means aggregate demand is less than aggregate supply, then the planned inventory rises above the desired level. To clear the unwanted increase in inventory, firms plan to reduce the output which reduces the employment in the economy and results in AD=AS. This equilibrium point is below the full employment level of equilibrium which is called underemployment equilibrium. 

Multiple choice economics employment: growth, informalisation and other issues unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Unemployment prevailing in Indian farms is _______.

  1. open unemployment

  2. disguised unemployment

  3. seasonal unemployment

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Economists call unemployment prevailing in Indian farms as disguised unemployment. One study conducted in the late 1950s showed about one-third of agriculture workers in India as disguisedly unemployed. Suppose a farmer has four acres of land and he actually needs only two workers and himself to carry out various operations on his farm in a year, but if he employs five workers and his family members such as his wife and children, this situation is known as disguised unemployment.
Productivity does not increase with additional workers.
Multiple choice economics employment: growth, informalisation and other issues unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Fill in the blanks from the alternatives given in the brackets.
Post graduate working as a peon is called ______.

  1. under employment

  2. unemployment

  3. structural unemployment

  4. seasonal employment

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Underemployment occurs when a person's skills, education, or experience exceed the requirements of their current job. A postgraduate working as a peon is a classic example of credential mismatch. The term 'under employment' (two words) is used here to describe this phenomenon. Unemployment means no work at all, while structural and seasonal refer to specific causes of joblessness, not credential mismatch.

Multiple choice economics employment: growth, informalisation and other issues unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

When due to introduction of new machinery, some workers tend to be replaced by machines, it is termed as ____________ unemployment.

  1. structural

  2. technological

  3. mechanical

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

When due to introduction of new machinery (change in technology) some workers tend to be replaced by machines; their unemployment is termed as Technological unemployment.

Multiple choice economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Aggregate supply is a function of the level of employment in the short run.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In the short run, the aggregate supply curve is typically modeled as a function of the level of employment, assuming other factors like capital and technology remain constant. As employment increases, output increases along the short-run aggregate supply curve.

Multiple choice economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

Changes in level of income and employment can be brought by changing aggregate demand.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In Keynesian theory, aggregate demand is the primary driver of output and employment in the short run. Changes in aggregate demand lead to changes in the equilibrium level of income and employment.