The unemployment that occurs due to changes in the technology or in the demand for particular products is called
- A.frictional unemployment
- B.structural unemployment
- C.cyclical unemployment
- D.disguised unemployment
Correct answer
Explanation
The correct answer is B, structural unemployment. Structural unemployment arises when the structure of the economy changes, through new technology or a lasting shift in what people buy, and workers' skills no longer match the jobs available.
When machines replace manual work, or when demand moves away from a product, the workers in that line lose their jobs even though the economy as a whole may be growing. Typewriter mechanics after the arrival of computers, or handloom weavers after power looms, are standard examples. This kind of unemployment tends to last long and is cured mainly by retraining, new skills and the movement of workers to other sectors.
A is wrong because frictional unemployment is the short gap while people move between jobs or search for their first one. C is wrong because cyclical unemployment comes from a fall in overall demand during a recession and fades in the recovery. D is wrong because disguised unemployment means more people working than needed, as on a small family farm, where removing some does not reduce output.
Exam tip: structural is a skill mismatch, frictional is between jobs, cyclical follows the business cycle, disguised has zero marginal productivity.
Practice Questions
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- A.Foreign Direct Investment
- B.Commercial Borrowing
- C.Invisibles
- D.External Assistance
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Read the full explanation →Which one among the following was the focus of the Twelfth Five-Year Plan?
- A.Sustainable and Inclusive Growth
- B.Social Justice and Equality
- C.Food, Work and Productivity
- D.Attainment of Self-reliance
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Read the full explanation →The Nehru-Mahalanobis Strategy of Development was implemented for the first time by which one of the following Five-Year Plans?
- A.First Five-Year Plan
- B.Second Five-Year Plan
- C.Third Five-Year Plan
- D.Seventh Five-Year Plan
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Read the full explanation →The Insolvency and Bankruptcy Board of India (IBBI) was established in the year
- A.2014
- B.2015
- C.2016
- D.2017
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- A.1 only
- B.2 only
- C.Both 1 and 2
- D.Neither 1 nor 2
Show answer
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