| Which of the following types of unemployment constitutes 'Natural Unemployment'? |
| 1. Frictional Unemployment |
| 2. Seasonal Unemployment |
| 3. Structural Unemployment |
| 4. Cyclical Unemployment |
| Select the correct answer using the codes given below; |
A) 1 and 2 only
B) 1 and 3 only
C) 3 and 4 only
D) 2 and 3 only
Correct Answer: B
Solution :
[b] Frictional Unemployment occurs when a worker is shifting from one job to the other. During the mobility period, he may unemployed for some time. It is a temporary phenomenon. In other words, Frictional unemployment is the time period between jobs when a worker is searching for, or transitioning from one job to another. It is sometimes called search engine and can be voluntary based on the circumstances of the unemployed individual. Seasonal Unemployment occurs only during seasonal months of the year. In India, it is very common in agriculture sector. In certain type of industries also this type of unemployment is found. Disguised unemployment and seasonal unemployment are two most common types of unemployment found in rural India particularly in farm sector. Structural Unemployment occurs due to structural changes in the economy. Structural changes can be due to change in technology (from labour intensive technology to capital intensive technology) or change in the pattern of demand- In a developing country like India, structural unemployment exists both in the rural and the urban areas. Cyclical Unemployment occurs because of cyclical fluctuations in the economy. Phases of boom, recession, depression and recovery are typical characteristics of a capitalist economy. In boom phase, high level of economic activity results in high level of employment whereas recession and depression phases marked with low demand results in more unemployment and during the recovery phase unemployment is slowly reduced.
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