Tag: unemployment and employment generation

Questions Related to unemployment and employment generation

When the aggregate spending is not sufficient to produce that level of output which requires full employment of the available resources, it results in ______________.

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

  1. inflation

  2. unemployment

  3. social problems

  4. none of the above

Show answer
Correct Option: B
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. 

The equilibrium below full employment level is termed as _____________.

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

  1. underemployment equilibrium

  2. over employment equilibrium

  3. aggregate disequilibrium

  4. none of the above

Show answer
Correct Option: A
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. 

_____________ may be defined as the situation when all those persons who are willing to work at the prevailing wage rate are getting work and are employed.

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

  1. Disguised employment

  2. Full employment

  3. Voluntary employment

  4. Involuntary employment

Show answer
Correct Option: B
Explanation:

Full employment refers to the situation when all the people who are willing to work in the economy at a prevailing wage rate are getting work and are employed to produce the desired level of output in the economy. 

Excessive aggregate spending leads to full employment level of output accompanied with ____________.

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

  1. lower income level

  2. poverty

  3. inflation

  4. none of the above

Show answer
Correct Option: C
Explanation:

When the aggregate spending is excessive then it leads to output which has full employment of available resources then it means aggregate demand is more than aggregate supply, then the planned inventory would fall below the desired level. To bring back the Inventory at the desired level, the producers expand the output but due to full employment of the available resources the output remains the same which leads to inflation in the economy.

Unemployment prevailing in Indian farms is _______.

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

  1. open unemployment

  2. disguised unemployment

  3. seasonal unemployment

  4. none of these

Show answer
Correct Option: B
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.

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

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

  1. under employment

  2. unemployment

  3. structural unemployment

  4. seasonal employment

Show answer
Correct Option: A

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

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

  1. structural

  2. technological

  3. mechanical

  4. seasonal.

Show answer
Correct Option: B
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.

Aggregate Supply and __________ are always equal.

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

  1. National Income

  2. Aggregate Demand

  3. Marginal Propensity to save are always equal.

  4. Average Propensity to Consume

Show answer
Correct Option: A
Explanation:

Aggregate supply refers to the desired level of output in the economy during an accounting year. It is through this output only that the producer sector generates income. Therefore, aggregate supply= consumption + savings. 

The gap by which actual aggregate demand exceeds the aggregate supply required to establish full employment equilibrium is known as ______.

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

  1. Deficient Demand

  2. Deflationary gap

  3. Inflationary Gap

  4. Excess Demand

Show answer
Correct Option: C
Explanation:
Inflationary gap is the excess of aggregate demand over and above its level required to maintain full employment equilibrium in the economy. It implies two things-
1) Planned aggregate demand in the economy happens to exceed its full employment level.
2) The level of aggregate demand surpasses the level of aggregate supply even when the available factors are fully utilized.

Effective demand is determined at the point of equality between aggregate demand and aggregate supply. 

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

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

The point at which aggregate demand (AD)  is equals aggregate supply (AS) is the point of effective demand  because at this level there is no tendency for income and output to change and the market is entirely clear.