Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Employment - Growth, Informalisation and Other Issues

Question:

If new machinery is being installed in a factory and some existing employees are fired due to lack of knowledge of machinery's operating procedure, then what kind of unemployment will it be called?

Options:

Disguised unemployment

Structural unemployment

Seasonal unemployment

Frictional unemployment

Correct Answer:

Structural unemployment

Explanation:

Structural unemployment is that unemployment which is caused by a mismatch between the skills that workers in the economy can offer, and the skills demanded of workers by employers. Structural unemployment is often brought about by technological changes that make the job skills of many workers obsolete. In the above question, all the workers which were unable to deal with the technological change were fired.