Correct Option
The correct option is (c) 2 and 3 only.
Explanation
Unemployment refers to a situation where individuals who are capable of working and willing to work at the prevailing wage rate are unable to find employment. It has significant negative impacts on the economy, transforming the population from an asset into a liability.
Statement-wise Analysis
- Statement 1 is Incorrect: Unemployment increases the economic overload on the working population. Since unemployed individuals do not contribute to production but still consume resources, the burden of supporting them falls on the employed section of society.
- Statement 2 is Correct: As unemployment rises, the dependence of the unemployed on the working population increases. The non-working population relies on the earnings of the working population for their sustenance, leading to a higher dependency ratio.
- Statement 3 is Correct: Human capital formation involves investment in education and health. When educated people are unable to find gainful employment, it implies a great social waste. The resources spent on their education do not yield economic returns, and their potential contribution to national income is lost.
Key Takeaway
Unemployment leads to the wastage of manpower resources, increases the economic load on the working population, and negatively impacts the overall growth of an economy.