Consider the following statements distinguishing Open Unemployment and Disguised Unemployment: 1. Open unemployment refers to people working at lower wages than their capability. 2. Disguised unemployment occurs when more people are engaged in a job than required. 3. Open unemployment is more common in urban areas, while disguised unemployment is prevalent in agriculture. Which of the statements given above is/are correct?

The correct option is 2 and 3 only Explanation Unemployment is broadly classified based on the nature of joblessness and the sector in which it occurs. The distinction between open unemployment and disguised unemployment lies in the visibility of idleness and the marginal productivity of the worker. Statement-wise Analysis: - Statement 1 is Incorrect. Open Unemployment refers to a situation where a person is willing and able to work at the prevailing wage rate but is unable to find any work. In this case, the person is visibly idle and completely without a job. The situation described in the statement-working at lower wages or below one's capability-is known as Underemployment. - Statement 2 is Correct. Disguised Unemployment is a phenomenon where more people are employed in an activity than are actually needed. In this scenario, the marginal productivity of the additional labor is zero. If these surplus workers are removed, the total output remains unchanged. This is a form of hidden unemployment. - Statement 3 is Correct. Open Unemployment is typically more prevalent in the industrial sector and urban areas (e.g., educated unemployment), where individuals migrate for jobs but fail to find them. Conversely, Disguised Unemployment is a characteristic feature of the rural agricultural sector in developing economies like India, where excess family labor is absorbed on limited land holdings due to a lack of alternative employment opportunities. Key Takeaway: Open Unemployment involves visible idleness where the worker has no job, whereas Disguised Unemployment involves workers who appear employed but contribute nothing to the total output (zero marginal productivity).

Consider the following statements… - NCERT Class 11 Economics MCQ

NCERT Class 11 Economics — Chapter 7: Employment: Growth, Informalisation and Other Issues

mcqmedium

Consider the following statements distinguishing Open Unemployment and Disguised Unemployment:

Open unemployment refers to people working at lower wages than their capability.
Disguised unemployment occurs when more people are engaged in a job than required.
Open unemployment is more common in urban areas, while disguised unemployment is prevalent in agriculture.

Which of the statements given above is/are correct?

NCERT textbook question

From NCERT Indian Economic Development · Page 107

Options

A1, 2 and 3
B2 and 3 only
C1 and 2 only
D2 only

Did you get this right?

Solution

The correct option is 2 and 3 only

Explanation

Unemployment is broadly classified based on the nature of joblessness and the sector in which it occurs. The distinction between open unemployment and disguised unemployment lies in the visibility of idleness and the marginal productivity of the worker.

Statement-wise Analysis:

Statement 1 is Incorrect.
Open Unemployment refers to a situation where a person is willing and able to work at the prevailing wage rate but is unable to find any work. In this case, the person is visibly idle and completely without a job. The situation described in the statement-working at lower wages or below one's capability-is known as Underemployment.
Statement 2 is Correct.
Disguised Unemployment is a phenomenon where more people are employed in an activity than are actually needed. In this scenario, the marginal productivity of the additional labor is zero. If these surplus workers are removed, the total output remains unchanged. This is a form of hidden unemployment.
Statement 3 is Correct.
Open Unemployment is typically more prevalent in the industrial sector and urban areas (e.g., educated unemployment), where individuals migrate for jobs but fail to find them. Conversely, Disguised Unemployment is a characteristic feature of the rural agricultural sector in developing economies like India, where excess family labor is absorbed on limited land holdings due to a lack of alternative employment opportunities.

Key Takeaway:

Open Unemployment involves visible idleness where the worker has no job, whereas Disguised Unemployment involves workers who appear employed but contribute nothing to the total output (zero marginal productivity).

Your note

More from Chapter 7: Employment: Growth, Informalisation and Other Issues

With reference to the composition of the Informal Sector, consider the following statements: 1. It includes millions of farmers and agricultural labourers. 2. It includes owners of small enterprises and the self-employed who do not have hired workers. 3. It excludes non-farm casual wage labourers who work for more than one employer. Which of the statements given above is/are correct?

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With reference to the net earning from foreign transactions, consider the following statements: 1. Net earnings from foreign transactions are always zero for an open economy. 2. It is negative if the value of imports exceeds the value of exports. 3. It is added to the Gross Domestic Product to arrive at the Gross National Product. Which of the statements given above is/are correct?

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Which one of the following is a significant factor contributing to the lower workforce participation rate of urban women compared to rural women in India?

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In the context of the Indian economy, which sector accounts for the largest share of the female workforce?

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Which one of the following sectors provides the highest share of employment to the Indian workforce?

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