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Prelims-IAS –ECONOMICS MCQ-26

1..Consider the following statement regarding unemployment:

  1. Structural employment occurs when demand for labour falls short to supply of labour due to rapidly growing population and the immobility.
  2. Frictional unemployment occurs due to change in the market condition.
  3. If a person does not contribute anything in the production process and he can be removed without affecting the productivity adversely, then it is called underemployment.

Which of the above statement is/are correct?

(a) 1 only
(b) 1 and 2 only
(c) 3 only
(d) All of the above

2..Which of the following is not a recommendation of the Tendulkar Committee on poverty line estimation?

  1. A shift away from calorie consumption based poverty estimation.
  2. A uniform poverty line basket (PLB) across rural and urban India.
  3. Incorporation of private expenditure on health and education while estimating poverty.
  4. The Committee recommended using Uniform Reference Period (URP) based estimates for estimating poverty.

Select the correct answer from the codes given below.
(a) 1, 2 and 3 only
(b) 2, 3 and 4 only
(c) 1, 3 and 4 only
(d) All of the above


3..If the unemployment rate under the Current Daily Status is higher than Usual Principal Status in a stable economy, it implies the presence of?

(a) Seasonal unemployment
(b) Structural unemployment
(c) Disguised unemployment
(d) Under-employment


4..With reference to “Natural Rate of Unemployment”, consider the following statements:

  1. It is the level of unemployment in an economy that is just consistent with a stable rate of Inflation.
  2. It is the unemployment that prevails when all markets in the economy are in equilibrium.
  3. It is the unemployment when the economy is just at its potential.

Which of the statements given above is/are correct?

(a)  1 and 2 only
(b)  2 and 3 only
(c)  1 and 3 only
(d)  1, 2 and 3


5..Which of the following statements is/are true about causes of unemployment?

  1. Frictional unemployment is caused due to inevitable time delays, while searching for a new job and exiting from the current job.
  2. Classical unemployment is caused by traditional barriers of a society.
  3. Structural unemployment is caused by fundamental shifts in the economy wherein, there is a mismatch between the skills that workers could offer or possess with respect to the demand and requirement of the employers.
  4. Unemployment trap is caused by absence of required skill set in the labour force.

Select the correct answer using the code given below.

(a)  1 and 3 only
(b)  2 and 3 only
(c)  1, 2 and 4 only
(d)  1, 2, 3 and 4


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