Question

An employment situation where the marginal productivity of agricultural labour is zero is known as ___________.

• A. structural unemployment
• B. seasonal unemployment
• C. cyclical unemployment
• D. disguised unemployment

Answer 1

Answer: (D)

disguised unemployment

A situation in which available work tasks are split among resources (typically labour) such that they seem fully employed but in reality much of their time is spent in unproductive activities is called disguised unemployment. Here the marginal productivity of labour comes to zero. When aggregate demand for goods and services in the economy falls far below its capacity, a large chunk of labour force gets employed. This is known as cyclical unemployment. While structural unemployment means the change in the demand pattern for goods necessitates change in the demand pattern for labour. But labour force cannot immediately metamorphose, matching the change in demand pattern. Due to these conditions a state of unemployment occurs that is known as structural unemployment.