Q. What is structural unemployment primarily caused by?
A.
Lack of skills
B.
Seasonal changes
C.
Economic cycles
D.
Temporary layoffs
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Solution
Structural unemployment is primarily caused by a mismatch between the skills of the workforce and the needs of employers, often due to technological changes or shifts in the economy.
Correct Answer:
A
— Lack of skills
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Q. What is the poverty line?
A.
A measure of economic growth
B.
A threshold income level
C.
A type of unemployment
D.
A government subsidy
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Solution
The poverty line is a threshold income level set by governments to determine the minimum income required to maintain a basic standard of living.
Correct Answer:
B
— A threshold income level
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Q. What is the primary measure of poverty in an economy?
A.
Income level
B.
Employment rate
C.
Inflation rate
D.
GDP growth
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Solution
The primary measure of poverty is often based on income level, which determines whether individuals or families fall below the poverty line.
Correct Answer:
A
— Income level
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Q. What is the role of the Reserve Bank of India (RBI) in relation to unemployment?
A.
Setting interest rates
B.
Regulating stock markets
C.
Managing foreign exchange
D.
Controlling inflation
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Solution
The RBI influences unemployment indirectly by setting interest rates, which affect borrowing, spending, and investment in the economy.
Correct Answer:
A
— Setting interest rates
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Q. What type of unemployment is caused by economic downturns?
A.
Frictional unemployment
B.
Structural unemployment
C.
Cyclical unemployment
D.
Seasonal unemployment
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Solution
Cyclical unemployment occurs during economic downturns when demand for goods and services decreases, leading to job losses.
Correct Answer:
C
— Cyclical unemployment
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Q. Which of the following can be a consequence of prolonged unemployment?
A.
Increased job satisfaction
B.
Improved skills
C.
Mental health issues
D.
Higher wages
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Solution
Prolonged unemployment can lead to mental health issues due to stress, anxiety, and loss of self-esteem associated with joblessness.
Correct Answer:
C
— Mental health issues
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Q. Which of the following is a common cause of unemployment?
A.
High inflation
B.
Technological advancements
C.
Increased consumer spending
D.
Government subsidies
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Solution
Technological advancements can lead to unemployment as machines and automation replace human labor in various industries.
Correct Answer:
B
— Technological advancements
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Q. Which of the following is a direct effect of high unemployment rates?
A.
Increased consumer spending
B.
Higher poverty levels
C.
Lower inflation
D.
Increased investment
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Solution
High unemployment rates typically lead to higher poverty levels as more individuals and families struggle to meet their basic needs.
Correct Answer:
B
— Higher poverty levels
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Q. Which of the following is a financial instrument that can help alleviate poverty?
A.
Government bonds
B.
Microloans
C.
Stocks
D.
Derivatives
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Solution
Microloans are small loans provided to individuals in poverty to help them start businesses or improve their livelihoods, thus alleviating poverty.
Correct Answer:
B
— Microloans
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Q. Which policy is typically used to reduce unemployment?
A.
Tight monetary policy
B.
Expansionary fiscal policy
C.
Contractionary fiscal policy
D.
Deflationary policy
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Solution
Expansionary fiscal policy, which involves increasing government spending and/or decreasing taxes, is used to stimulate the economy and reduce unemployment.
Correct Answer:
B
— Expansionary fiscal policy
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