All questions of Employment: Growth, Informalisation and other issues for Commerce Exam

D

GDP is the final value of the goods and services produced within the geographic boundaries of a country during a specified period of time, normally a year. GDP growth rate is an important indicator of the economic performance of a country. 

Non farm enterprises are those which does not take part in agricultural activities.......or products.... so correct answer is d

Economics activity

Gross National Product

Calculation of Inflation Rate

Inflation rate is the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. To calculate the inflation rate, the formula used is:

Inflation Rate = [(Current Year CPI - Base Year CPI) / Base Year CPI] x 100

Given Data

Here, the given data is:

- Period: 2004-2005 to 2010-2011 (7 years)
- Inflation rate: Unknown

Solution

To calculate the inflation rate, we need CPI data for both the years. However, we are not provided with the CPI data. Hence, we cannot calculate the exact inflation rate. However, we can estimate the inflation rate based on the historical trend.

According to the historical trend, the average inflation rate in India during the period 2004-2005 to 2010-2011 was around 6% per annum. Hence, the correct answer is option C, i.e., 6%.

Conclusion

The inflation rate from 2004-2005 to 2010-2011 is estimated to be around 6% per annum based on the historical trend.

Enhancing supplies

A) Workforce / Total Rural Population

Higher In urban areas

A general rise in prices; the rate at which prices rise

The number of people who reside in a particular locality at a particular point of time is known as Population.
Explanation:
- Population: The population refers to the total number of individuals (people) living in a specific area or locality at a given time.
- The population of an area can be determined through various methods such as census, surveys, and administrative records.
- It is an important demographic indicator that helps in understanding the size, composition, and characteristics of a specific population group.
- The population of a locality can vary over time due to factors such as birth rate, death rate, immigration, and emigration.
- Governments, policymakers, and researchers use population data to make informed decisions regarding resource allocation, urban planning, healthcare, education, and other social services.
- Understanding the population dynamics is crucial for planning and development purposes, as it helps in identifying the needs and demands of the population.
- Population data also plays a significant role in determining social and economic indicators such as population growth rate, population density, age distribution, gender ratio, and literacy rate.
- Hence, the correct answer to the given question is Population (Option B).

The correct answer is D. Seasonal unemployment. Let's understand why Indian agriculture ensures employment for only 7-8 months and leaves laborers unemployed for the remaining period:
Reasons for seasonal unemployment in Indian agriculture:
1. Dependence on monsoons: Indian agriculture heavily depends on monsoons for irrigation. As a result, farming activities can only take place during the monsoon season, which lasts for about 7-8 months in most parts of the country.
2. Seasonal nature of crops: Certain crops, such as rice, wheat, and pulses, have specific growing seasons. Farmers cultivate these crops during the monsoon season and harvest them once they are ready. This leads to a concentration of agricultural activities within a limited time frame.
3. Lack of irrigation facilities: Many parts of rural India lack proper irrigation facilities, making it difficult for farmers to cultivate crops throughout the year. As a result, they are restricted to the monsoon season for agricultural activities.
4. Limited employment opportunities: Due to the seasonal nature of agriculture, there is limited scope for employment in the sector throughout the year. This leads to a situation where laborers remain unemployed for the remaining period after the harvest season.
5. Lack of alternative sources of income: In rural areas, where agriculture is the primary source of livelihood, the lack of employment opportunities in agriculture during non-monsoon months leaves laborers with limited alternative sources of income. This further exacerbates the problem of seasonal unemployment.
Conclusion:
Seasonal unemployment in Indian agriculture is a significant issue that needs to be addressed. Efforts must be made to improve irrigation facilities, promote crop diversification, and create alternative employment opportunities to reduce the dependence on the monsoon season and provide year-round employment for laborers in the agricultural sector.

Understanding Jobless Growth
Jobless growth refers to an economic scenario where the Gross Domestic Product (GDP) of a country increases, but employment opportunities do not rise accordingly. This phenomenon is increasingly observed in many advanced economies and can be explained through several key factors.
Key Characteristics of Jobless Growth:
- Technological Advancements:
Innovations and automation can lead to increased productivity, allowing firms to produce more with fewer workers. This can result in higher GDP without a necessary increase in jobs.
- Capital Intensive Industries:
Sectors that rely heavily on machinery and technology may see growth in output without a corresponding rise in employment. For example, companies that invest in robotics may experience growth while minimizing hiring.
- Globalization:
Companies may outsource jobs to countries with cheaper labor, leading to GDP growth in the home country due to increased efficiency, but a lack of job creation domestically.
- Skill Mismatch:
There may be a disconnection between the skills required for new jobs and the skills possessed by the workforce, leading to growth without job creation.
Consequences of Jobless Growth:
- Increased Inequality:
As GDP rises but employment does not, wealth can become concentrated among those who own capital, exacerbating income inequality.
- Social Tension:
Discontent among the unemployed can lead to social unrest, as individuals may feel left out of the economic growth.
- Policy Challenges:
Governments face difficulties in addressing unemployment while trying to maintain economic growth, creating a complex policy environment.
In summary, jobless growth signifies a troubling trend where economic growth does not translate into job creation, highlighting the need for targeted policies to ensure that growth benefits a wider segment of the population.

No

In disguised unemployment, more people are employed than what is required. In this, an individual's potential is not fully utilized.

Factors contributing to the potential labor force of India

a) Those who are willing to work
- The potential labor force of India includes individuals who are willing and motivated to work. This willingness to work is crucial as it drives individuals to actively seek out employment opportunities and contribute to the economy.

b) Those who are fit to work
- Another important factor contributing to the potential labor force of India is the physical and mental fitness of individuals. Those who are physically and mentally fit are more likely to actively participate in the workforce and contribute effectively to the economy.

c) People in a particular age group
- The potential labor force of India also includes individuals in a particular age group that is considered suitable for employment. This age group typically ranges from working-age adults to individuals nearing retirement age who are still willing and able to work.

d) All of these
- In conclusion, the potential labor force of India consists of individuals who are willing to work, fit to work, and fall within a particular age group that makes them suitable for employment. This diverse pool of individuals forms the backbone of the country's workforce and plays a crucial role in driving economic growth and development.

The answer is b) Open unemployment. Urban areas suffer most from open unemployment, which occurs when individuals are actively searching for work, but are unable to find it. Disguised unemployment occurs when an individual is employed but is not utilizing their full potential in the job. Seasonal unemployment occurs when employment opportunities are only available at certain times of the year.

The correct answer is B: Informal
Explanation:
An establishment with four hired workers is considered as an informal sector establishment. Here's why:
- Formal sector: The formal sector refers to businesses or organizations that are registered, regulated, and operate within the legal framework of a country. These establishments typically have a larger number of employees and follow specific labor laws and regulations.
- Informal sector: The informal sector consists of unregistered or small-scale businesses that operate outside the legal framework. These establishments often have a limited number of employees and may not comply with labor laws or regulations. They are usually characterized by low wages, lack of social security benefits, and limited job security.
- In the given scenario, the establishment with four hired workers does not meet the criteria for a formal sector establishment as it falls below the threshold for larger businesses.
- Therefore, the establishment with four hired workers would be considered as an informal sector establishment.
To summarize, an establishment with four hired workers is classified as an informal sector establishment, as it operates outside the legal framework and does not adhere to formal labor laws and regulations.

Disguised unemployment is a situation where more people are engaged in a particular activity than required. It is a common feature of agrarian economies where there is a lack of alternative employment opportunities. The following statement is false regarding disguised unemployment:

Marginal productivity of worker is high

Explanation:

Marginal productivity refers to the additional output produced by an additional unit of input. In the case of disguised unemployment, there are more workers engaged in a particular activity than required. This means that the marginal productivity of each worker is low, as there is not enough work to be done for everyone to be fully productive.

The other three statements are true regarding disguised unemployment:

Mounting pressure of population in rural areas with no alternative employment: In rural areas where there are limited employment opportunities, the population tends to grow faster than the available jobs. As a result, there is an excess supply of labor, and some people end up being engaged in activities where their contribution is not needed.

Feature of agrarian economy: Disguised unemployment is more prevalent in agrarian economies where the majority of the population is engaged in agriculture. Due to the limited productivity of agriculture, there is often not enough work to keep everyone fully employed.

More people are engaged than required: Disguised unemployment occurs when more people are engaged in a particular activity than required. This leads to low productivity and inefficiency as each worker is not fully utilized.

In conclusion, the marginal productivity of a worker is low in disguised unemployment, and the other three statements are true.

Will employ 50% of India's workforce.
b)India will achieve full employment with every citizen above the age of 18 being employed.
c)India will become a knowledge-based economy with a highly skilled workforce.
d)India will create 100 million new jobs in the service sector by 2020.

b)India will achieve full employment with every citizen above the age of 18 being employed. (This statement is false as it is unrealistic to expect every citizen above the age of 18 to be employed, as some may choose not to work or may not be able to work due to various reasons.)

Understanding Unemployment
Unemployment refers to a situation where individuals who are willing and able to work are unable to find job opportunities. This concept is crucial in understanding the dynamics of the labor market and its impact on the economy.
Key Characteristics of Unemployment:
- Willingness to Work:
Individuals are actively seeking employment and are ready to work at the prevailing wage rate.
- Absence of Job Opportunities:
Despite their willingness, these individuals are unable to secure jobs due to various factors such as economic downturns, lack of job vacancies, or skills mismatch.
- Measurement of Unemployment:
Economists often measure unemployment rates through surveys and data collection to assess the health of the economy and labor market.
Types of Unemployment:
- Cyclical Unemployment:
Linked to the economic cycle, where job losses occur during recessions.
- Structural Unemployment:
Arises from shifts in the economy that create a mismatch between workers’ skills and job requirements.
- Frictional Unemployment:
Short-term unemployment that occurs when individuals are temporarily between jobs or entering the workforce for the first time.
Conclusion:
In summary, option 'A', unemployment, accurately describes the situation where a laborer is willing to work at the existing wage rate but cannot find employment. Understanding this concept helps policymakers develop strategies to stimulate job creation and address labor market inefficiencies.

The correct answer is option 'B': The number of persons usually employed or willing to be employed.

The labour force is a term commonly used in economics and refers to the total number of individuals who are either currently employed or are actively seeking employment. It includes both those who are employed and those who are unemployed but actively looking for work. Let's delve into the details to understand this concept more comprehensively.

1. Definition of labour force:
The labour force is a key economic indicator that helps to measure the number of people who are available to work and contribute to the production of goods and services in an economy. It consists of two categories: employed individuals and unemployed individuals.

2. Employed individuals:
The labour force includes individuals who are currently working and earning income through formal employment, self-employment, or part-time work. Employed individuals are considered part of the labour force because they are actively involved in economic activities and contribute to the overall productivity of the economy.

3. Unemployed individuals:
The labour force also includes individuals who are currently without a job but are actively searching for employment opportunities. These individuals are considered unemployed and are part of the labour force because they are willing and able to work. They may be actively seeking work through job applications, interviews, or other job-seeking activities.

4. Exclusion from the labour force:
Certain groups of people are not considered part of the labour force. These include individuals who are not actively seeking employment, such as full-time students, retirees, and individuals who are unable to work due to disabilities or other reasons. Additionally, individuals who have given up looking for employment due to discouragement are also excluded from the labour force.

5. Importance of measuring the labour force:
Understanding the size and composition of the labour force is crucial for policymakers, economists, and businesses. It helps in determining the overall employment situation, calculating unemployment rates, and formulating appropriate economic policies. It also aids in analyzing the demographic and socioeconomic characteristics of the labour force, such as age, gender, education levels, and employment trends.

In conclusion, the labour force refers to the total number of individuals who are either employed or actively seeking employment. It encompasses both employed individuals and those who are unemployed but actively looking for work. Measuring the labour force provides valuable insights into the employment situation and aids in policymaking and economic analysis.

Labour Force: False Statement

Introduction:

Labour force is an important concept in economics that refers to the number of people who are employed or actively seeking employment. The labour force includes individuals who are engaged in productive activities and are capable of generating income for themselves and their families.

False Statement:

The false statement regarding the labour force is option 'A', which states that it includes all members of the population.

Explanation:

The labour force does not include all members of the population. It only includes those individuals who are considered to be economically active, meaning they are either employed or seeking employment. The following points explain the components of the labour force:

- Includes those engaged in productive activities: The labour force includes individuals who are engaged in productive activities and are capable of generating income for themselves and their families. This includes both employed and unemployed individuals who are actively seeking employment.
- Excludes very young and very old people: The labour force excludes individuals who are too young or too old to work. This includes children who are not old enough to work and individuals who have reached retirement age and are no longer seeking employment.
- Excludes mentally challenged people: The labour force also excludes individuals who are mentally challenged and are unable to work. These individuals may require special care and support, and may not be capable of generating income for themselves.

Conclusion:

In conclusion, the false statement regarding the labour force is that it includes all members of the population. The labour force only includes individuals who are economically active, meaning they are either employed or seeking employment. It excludes very young and very old people, as well as mentally challenged individuals who are unable to work.

Disguised unemployment refers to a situation where more people are engaged in a particular production process than actually required. In such a scenario, removing some workers would not lead to a decrease in output. Disguised unemployment is typically found in the agricultural sector, where there is a large surplus of labor.

Causes of disguised unemployment

There are several reasons why disguised unemployment can occur:

1. Lack of alternative employment opportunities: In rural areas, there may be limited job opportunities available, and hence, people may engage in agricultural work even if they are not needed.

2. Low productivity: Due to the use of outdated technology and farming techniques, the productivity of labor may be low, leading to the need for more workers than necessary.

3. Fragmentation of landholdings: In many parts of the world, land is divided into small plots, which makes it difficult to achieve economies of scale. As a result, many people work on small plots of land, even if they are not needed.

Effects of disguised unemployment

Disguised unemployment can have several negative effects:

1. Low wages: When there is an oversupply of labor, wages tend to be low, which can lead to poverty and income inequality.

2. Low productivity: Disguised unemployment can reduce the productivity of the agricultural sector, as workers may not be fully utilized.

3. Wastage of resources: When more people are engaged in a particular production process than actually required, it can lead to a wastage of resources, such as land, water, and fertilizer.

Conclusion

Disguised unemployment is a common phenomenon in many parts of the world, particularly in rural areas. It can have several negative effects on the economy, such as low wages, low productivity, and wastage of resources. Policymakers need to address this issue by creating alternative job opportunities and improving the productivity of the agricultural sector.

Economic Activity in Tertiary Sector

Tertiary sector is also known as the service sector. This sector generally provides services to the consumers and other sectors of the economy. It includes a wide range of activities such as banking, insurance, transportation, communication, education, healthcare, tourism, and many more.

Not in Tertiary Sector: Bee-keeping

Bee-keeping is an economic activity that involves the rearing and management of bees for the production of honey, wax, pollen, and other bee-related products. It falls under the primary sector of the economy as it involves the extraction of natural resources. Bee-keeping is also considered an agricultural activity as it involves the cultivation of crops and flowers to provide a source of food for bees.

Conclusion

In conclusion, bee-keeping is not an economic activity that falls under the tertiary sector. It is a primary sector activity that involves the extraction of natural resources and cultivation of crops. The tertiary sector involves the provision of services to consumers and other sectors of the economy.

Underemployment occurs when people are working less than they are capable of. This means that they have the skills and abilities to work more hours or in a more challenging job, but are not able to do so due to a lack of available work or other barriers to employment.

Causes of underemployment:

1. Lack of job opportunities: When there are not enough job opportunities in a particular area, people may be forced to take part-time or low-paying jobs.

2. Lack of skills or education: Some people may not have the necessary skills or education to qualify for higher-paying jobs.

3. Discrimination: Women, minorities, and other marginalized groups may face discrimination in the job market, which can limit their employment opportunities.

4. Technological advancements: Automation and other technological advancements may lead to job loss or a decrease in available work.

5. Seasonal or temporary work: Some jobs may only be available during certain times of the year or may be temporary in nature, which can lead to underemployment during other times.

Impact of underemployment:

1. Economic impact: Underemployment can have a negative impact on the economy, as it leads to a decrease in consumer spending and a decrease in taxable income.

2. Mental health impact: Underemployment can lead to feelings of frustration, stress, and anxiety, which can negatively impact mental health.

3. Social impact: Underemployment can lead to social issues such as poverty, homelessness, and crime.

4. Career impact: Underemployment can limit career growth and development, as workers may not have the opportunity to gain new skills or advance in their careers.

In conclusion, underemployment is a complex issue that can have a wide range of causes and impacts. It is important for policymakers and employers to address this issue in order to create a more equitable and prosperous society.

Service Sector Activities:
The service sector includes activities that involve the provision of services rather than the production of goods. These activities are focused on providing intangible value to consumers. Some of the key activities that fall under the service sector are:
1. Transportation: This includes the movement of goods and people from one place to another, such as by air, land, or sea. It encompasses various modes of transportation, including airlines, railways, roadways, and shipping.
2. Communication: This involves the transmission and exchange of information through various means, including telecommunications, internet services, broadcasting, and postal services. It enables individuals and organizations to communicate and stay connected.
3. Banking and Financial Services: This sector encompasses activities related to banking, insurance, investment, and financial management. It includes services such as loans, credit, savings, investment advisory, and risk management.
4. Healthcare: This sector focuses on providing medical services to individuals, including hospitals, clinics, doctors, nurses, and other healthcare professionals. It includes services related to diagnosis, treatment, prevention, and rehabilitation of diseases and illnesses.
5. Tourism and Hospitality: This involves activities related to travel, accommodation, and entertainment provided to tourists and travelers. It includes services such as hotels, restaurants, tour operators, travel agencies, and recreational facilities.
6. Education: This sector encompasses activities related to the provision of formal and informal education services. It includes schools, colleges, universities, training centers, and other educational institutions.
7. Professional Services: This includes activities provided by professionals in various fields, such as legal services, accounting, consulting, architecture, engineering, and IT services.
8. Retail and Wholesale Trade: This sector involves the buying and selling of goods to consumers (retail trade) or to other businesses (wholesale trade). It includes activities such as supermarkets, malls, e-commerce, and distribution channels.
9. Entertainment and Media: This includes activities related to the production and distribution of entertainment content, such as movies, music, television shows, publishing, advertising, and broadcasting.
10. Real Estate: This sector involves activities related to the buying, selling, and renting of properties, including residential, commercial, and industrial real estate.
These are just some examples of activities that fall under the service sector. The service sector plays a crucial role in the economy by providing employment opportunities, generating revenue, and contributing to overall economic growth.

Primary sector means Agricultural sector which has largest employer in Indian economy. It employs nearly 51%of the labour in India.