Which of the following unemployment is the result of depression in an economy?
- A.Cyclical unemployment
- B.Frictional unemployment
- C.Seasonal unemployment
- D.Structural unemployment
Correct answer
Explanation
The correct answer is A, Cyclical unemployment. Cyclical unemployment is the unemployment that a slump or depression in the economy creates: when demand falls, firms sell less, cut production and let workers go, and those jobs come back once demand recovers. It is therefore tied to the trade cycle of boom and slump, and it is the kind of unemployment John Maynard Keynes wrote about after the Great Depression, when he argued that the government should spend to lift demand. It is common in industrial economies and rare in a largely agricultural one such as India, where disguised and seasonal unemployment matter more. B is wrong because frictional unemployment is the short gap while a worker changes jobs or a fresh graduate hunts for the first one. C is wrong because seasonal unemployment comes from work being available only in some months, as in farming or sugar mills. D is wrong because structural unemployment arises when the skills workers hold no longer match the jobs the economy offers. Exam tip: a depression brings cyclical unemployment, while a skills mismatch brings structural unemployment.
Practice Questions
View allAccording to the law of diminishing marginal utility, as the amount of a good consumed increases, the marginal utility of that good tends to
- A.improve
- B.diminish
- C.remain constant
- D.first diminish and then improve
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Each extra unit of a good gives a consumer less additional satisfaction than the unit before it, so marginal utility falls as consumption rises.
Read the full explanation →Consider the following statements about impact of tax : 1. A tax is shifted forward to consumers if the demand is inelastic relative to supply. 2. A tax is shifted backward to producers if the supply is relatively more inelastic than demand. Which of the statements given above is/are correct?
- A.1 only
- B.2 only
- C.Both 1 and 2
- D.Neither 1 nor 2
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The burden of a tax falls more heavily on whichever side of the market is less elastic, the side that cannot easily walk away.
Read the full explanation →UBI, as an alternative for subsidies in poverty alleviation, stands for
- A.Union Basic Income
- B.Undefined Basic Income
- C.Unconditional Basic Income
- D.Universal Basic Income
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UBI is the idea of paying every citizen a fixed sum of money regularly, without conditions, in place of a large number of separate subsidies and welfare schemes.
Read the full explanation →Who among the following is the Chairman of the Fourteenth Finance Commission?
- A.C. Rangarajan
- B.Vijay Kelkar
- C.Y. V. Reddy
- D.Rakesh Mohan
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The Fourteenth Finance Commission, set up in 2013 for the award period 2015-2020, was chaired by Y. V. Reddy, a former Governor of the Reserve Bank of India.
Read the full explanation →Why was constitutional amendment needed for introducing GST?
- A.States were not willing to agree with the Union for introduction of GST without amendment in the Constitution.
- B.GST was to be implemented on concurrent base and Article 246 was inadequate for such a case.
- C.The Empowered Committee of Finance Ministers had recommended for constitutional amendment.
- D.The GST Council had recommended for constitutional amendment so that its power enhances.
Show answer
GST is levied by the Union and the States together on the same supply, and Article 246, which splits taxing powers between them through separate lists, did not allow such a concurrent tax.
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