Tag: liquidity preference and profit

Questions Related to 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
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. $4, 2, 1, 3$

  2. $1, 3, 4, 2$

  3. $4, 3, 1, 2$

  4. $1, 2, 4, 3$

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Correct Option: B

Sir Charles Wood's Despatch on Educational reform led to the establishment of first three universities in India.they were established during the year _____________.

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. 1854

  2. 1857

  3. 1858

  4. 1904

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Correct Option: A
Explanation:

In 1854 , Sir Charles Wood in his Despatch on Educational Reforms led to the establishment of first three universities in India at Bombay , Calcutta and Madras.

Frictional unemployment is consistent with full employment.

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. True

  2. False

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Correct Option: A
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. 

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

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. 3 to 4%

  2. 5 to 8%

  3. upto 2%

  4. 10 to 15%

Show answer
Correct Option: A
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. 

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

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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

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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

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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

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Correct Option: A