Statement I: People who are neither working nor looking for jobs are not counted in the unemployment rate defined in NCERT.
Statement II: If some students start looking for jobs but none of them finds one, the unemployment rate rises.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Both Statement I and Statement II are true.
The unemployment rate counts only people who are working or looking for jobs. Anyone not looking for a job is left out of both the top and the bottom of the ratio.
Statement I: People who are neither working nor looking for jobs are not counted in the unemployment rate defined in NCERT. — True. They are in neither group of the definition.
Statement II: If some students start looking for jobs but none of them finds one, the unemployment rate rises. — True. The new job-seekers add the same number to the top and the bottom. Since the top is smaller, the ratio rises. For example, 100 ÷ 1,000 = 10 per cent; with 50 more job-seekers, 150 ÷ 1,050 = about 14.3 per cent.
NCERT (2026-27): “1.1 Emergence of Macroeconomics … Demand for goods in the market was low, many factories were lying idle, workers were thrown out of jobs. In USA, from 1929 to 1933, unemployment rate rose from 3 per cent to 25 per cent (unemployment rate may be defined as the number of people who are not working and are looking for jobs divided by the total number of people who are working or looking for jobs). Over the same period aggregate output in USA fell by about 33 per cent. …” |