Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

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

Question:

COVID 19 has affected the economies all over the world. Almost all the countries on the globe were affected by it and still continue to be affected. India is not an exception. Many people lost their lives; many people lost their jobs. Apart from the nationwide lockdown that was imposed by the Prime Minister Shri Narendra Modi on 24 March, 2020 for 21 days which got further extended, multiple lockdowns were imposed by the ministers within their states. It created a sort of shortage of food items in the local market with essential items sweeping off the shelves within hours and many people weren’t able to get their hands on even daily basic essentials as milk and bread. It affected the production of the commodities and thus the national income of the country. The entire supply chain was disrupted and every sector of the economy was affected badly. Coronavirus pandemic created a situation of panic in the country with people hustling to get hospital beds and oxygen cylinders. It shows the under preparedness of the medical system and of the shortage of quality medical infrastructure in the country.

Many people losing their jobs, as talked in above paragraph, shows which kind of unemployment?

Options:

Cyclical unemployment

Disguised unemployment

Voluntary unemployment

Structural unemployment

Correct Answer:

Cyclical unemployment

Explanation:

Swings in business cycles and recession like situations causes cyclical unemployment. Since COVID had a negative effect on the economy (recession like situation), the unemployment caused by it can be termed as cyclical unemployment.
Disguised unemployment: It is also known as hidden unemployment. It is a situation where labour that is employed in a job is not actually utilised for the production of goods and services.
Voluntary unemployment: It is a situation in which someone chooses to not work.
Structural unemployment: It is a type of unemployment that can last for many years and can be caused by changes in technology or shifting demographics.