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  1. Home
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International Relations·Easy

Which of the following statements is/are correct about disguised unemployment? 1. It is unemployment that affects aggregate output. 2. An economy demonstrates disguised unemployment when productivity is low and too many workers are filling too few jobs. Select the correct answer using the code given below:

Which of the following statements is/are correct about disguised unemployment?

1. It is unemployment that affects aggregate output.

2. An economy demonstrates disguised unemployment when productivity is low and too many workers are filling too few jobs.

Select the correct answer using the code given below:

Options

  1. a.

    1 only

  2. b.

    2 only

    Correct answer
  3. c.

    Both 1 and 2

  4. d.

    Neither 1 nor 2

Explanation

  • Disguised unemployment exists where part of the labour force is either left without work or is working in a redundant manner where worker productivity is essentially zero.
  • It is unemployment that does not affect aggregate output. An economy demonstrates disguised unemployment when productivity is low and too many workers are filling too few jobs.
  • Disguised unemployment exists frequently in developing countries whose large populations create a surplus in the labour force. It can be characterized by low productivity and frequently accompanies informal labour markets and agricultural labour markets, which can absorb substantial quantities of labour.

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