Test: Employment Growth And Other Issues - 2 - Commerce MCQ

The false statement regarding India Vision 2020: Employment is option A.
Explanation:
India Vision 2020 is a comprehensive plan for the development of the country in various sectors, including employment. Let's analyze each option to identify the false statement:
A: By the year 2020 primary sector's employment in the total workforce is expected to increase to less than 45 percent. - This statement is false because the primary sector's employment in the total workforce is expected to decrease, not increase, as the country aims to shift towards a more service-based economy.
B: Increase the role of SME's, which create the majority of jobs. - This statement is true. Small and Medium Enterprises (SMEs) play a crucial role in generating employment opportunities in India.
C: India needs to generate in the order of 200 million additional employment opportunities over the next two decades. - This statement is true. With a growing population and increasing workforce, India needs to create a significant number of new job opportunities to meet the demand.
D: None - This statement is not relevant as it does not provide any information regarding the false statement.
Therefore, the false statement regarding India Vision 2020: Employment is option A.

Explanation:
The correct answer is C: Higher in rural areas.
Reasoning:
- In many developing countries, such as India, female worker participation rate is generally higher in rural areas compared to urban areas.
- This can be attributed to various factors such as:
- Limited job opportunities in rural areas, leading to a higher necessity for women to work.
- Traditional gender roles and societal expectations, where women are more likely to participate in agricultural or informal labor in rural areas.
- Limited access to education and skill development opportunities for women in rural areas, leading to a higher proportion of women engaging in low-skilled labor.
- However, it is important to note that this is a generalized trend and may vary from country to country and within different regions.
To summarize, the female worker participation rate is generally higher in rural areas compared to urban areas due to factors such as limited job opportunities, traditional gender roles, and limited access to education and skill development.

Explanation:
When a labor does not get employment opportunity despite his willingness to work at the existing wage rate, it is referred to as unemployment. Here is a detailed explanation:
Unemployment is a situation where individuals who are able and willing to work are unable to find suitable employment opportunities. It is an economic indicator that reflects the state of the labor market.
- Unemployment: Unemployment occurs when a labor force participant is actively seeking employment but is unable to find a job. It is a measure of the number of people who are without work but are actively looking for employment.
- Willingly unemployed: This term suggests that the individual is voluntarily choosing not to work, even though there may be employment opportunities available.
- Underemployment: Underemployment refers to a situation where individuals are working in jobs that are below their skill level or working part-time when they desire full-time employment.
- None: This option implies that there is no specific term or concept to describe the situation.
Therefore, the correct answer is Unemployment (Option A) as it accurately describes the situation when a labor does not get employment despite their willingness to work at the existing wage rate.

Job Security in the Organised Sector

In the organised sector, workers enjoy job security due to several factors:

• Labour laws and regulations: The organised sector is governed by labour laws and regulations that provide protection to workers, ensuring job security.


• Formal employment contracts: Workers in the organised sector usually have formal employment contracts that outline their rights and responsibilities, including job security provisions.


• Trade unions: The presence of trade unions in the organised sector helps in negotiating and safeguarding the interests of workers, including job security.


• Collective bargaining: Workers in the organised sector have the power to collectively bargain for better working conditions, wages, and job security.


• Government support: The government often provides support and protection to workers in the organised sector through various social security schemes, such as provident funds, pension schemes, and insurance coverage.

Overall, the organised sector offers a more secure working environment for employees compared to other sectors.

The shortage of long-term financing not only undermines capital formation due to which it becomes really hard to start a new business. Without a business it is hard to find work for the potential employees. Due to which lack of employment is caused.

Economic Activities in the Tertiary Sector:
- Banking
- Teaching
- Working in a call centre
Economic Activity Not in the Tertiary Sector:
- Bee-keeping
Explanation:
The tertiary sector refers to the sector of the economy that provides services to consumers and businesses. It includes activities such as banking, education, healthcare, and customer support. Bee-keeping, on the other hand, falls under the primary sector, which involves the extraction and production of raw materials. Bee-keeping is the practice of raising bees for honey, beeswax, and other bee-related products. It is an agricultural activity that falls under the primary sector as it involves the cultivation and harvesting of a natural resource (honey) rather than providing a service directly to consumers or businesses. Therefore, bee-keeping is not considered an economic activity in the tertiary sector.

Unemployment in rural areas:
Unemployment in rural areas can be categorized into three types: seasonal unemployment, disguised unemployment, and industrial unemployment. Let's explain each one in detail:
1. Seasonal Unemployment:
- Seasonal unemployment refers to the situation where individuals are unemployed during certain seasons or periods of the year.
- In rural areas, this type of unemployment is prevalent in agricultural activities that are dependent on specific seasons, such as sowing or harvesting crops.
- Farmers and agricultural laborers may experience unemployment during off-seasons when there is no agricultural work available.
2. Disguised Unemployment:
- Disguised unemployment refers to a situation where more people are engaged in a particular activity than required.
- In rural areas, this type of unemployment is common in traditional agriculture, where several family members work on a small piece of land, but the productivity remains the same.
- It is called "disguised" as the surplus workers do not contribute significantly to the overall productivity and can be withdrawn without affecting the output.
3. Industrial Unemployment:
- Industrial unemployment specifically refers to the lack of employment opportunities in the industrial sector within rural areas.
- As rural areas usually lack large-scale industries and factories, there is limited scope for employment in the industrial sector.
- This type of unemployment is a result of limited industrialization and lack of diversified economic activities in rural areas.
Conclusion:
In summary, unemployment in rural areas includes seasonal unemployment, disguised unemployment, and industrial unemployment. Seasonal unemployment occurs due to the dependency on specific agricultural seasons, disguised unemployment arises from surplus workers in traditional agriculture, and industrial unemployment results from limited industrialization in rural areas. Therefore, the correct option is B: I, II.

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.

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).

Disguised unemployment is:


Disguised unemployment refers to a situation where more people are engaged in production than actually required. It is a phenomenon commonly observed in sectors such as agriculture, where there is often an excess supply of labor. Here are the key points to understand about disguised unemployment:
1. Excess labor:
- Disguised unemployment occurs when there are more workers employed in a particular sector or industry than needed for efficient production.
- The presence of excess labor leads to inefficiency and underutilization of resources.
2. Lack of productivity:
- In disguised unemployment, the additional workers do not contribute significantly to the overall productivity or output of the industry.
- The marginal productivity of each worker becomes close to zero, as the work is divided among a larger number of workers.
3. Low wages and underemployment:
- Disguised unemployment often leads to low wages for workers, as the demand for labor is less than the available supply.
- Workers may also face underemployment, where they are unable to find full-time employment and have to settle for part-time or seasonal work.
4. Causes:
- Disguised unemployment may arise due to various factors such as technological advancements, lack of diversification in the economy, and limited job opportunities in rural areas.
- It can also be influenced by social and economic factors, such as a lack of education and skills among workers.
5. Impact:
- Disguised unemployment hinders economic growth and development as it leads to the inefficient use of resources.
- It can result in decreased productivity, lower income levels, and increased poverty in affected areas.
- Addressing disguised unemployment requires the implementation of policies and measures that promote job creation, skill development, and economic diversification.
In conclusion, disguised unemployment occurs when there is an excess supply of labor in a particular sector or industry, leading to underutilization of resources and low productivity. It is important for policymakers to address this issue by creating more job opportunities, promoting skill development, and encouraging economic diversification.

Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. In such situation you have to pay more that what you used to pay.

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.

Solution to long-run inflation:
Enhancing supply:
- Increasing the supply of goods and services can help control inflation in the long run.
- When the supply of goods and services increases, it reduces the pressure on prices to rise.
- This can be achieved through various measures such as promoting investments, improving infrastructure, and encouraging technological advancements.
- Increasing productivity and efficiency in production processes can also contribute to enhancing supply.
Controlling demand:
- Along with enhancing supply, controlling demand is also important to address inflation in the long run.
- Measures like fiscal and monetary policies can be implemented to manage aggregate demand.
- Fiscal policies include government spending, taxation, and public debt management to influence demand.
- Monetary policies involve managing interest rates, money supply, and credit availability to regulate demand.
- By carefully managing demand, excessive spending and price pressures can be controlled.
Both:
- The long-run solution to inflation lies in a combination of enhancing supply and controlling demand.
- These two factors are interrelated and need to be addressed simultaneously to effectively manage inflation.
- Focusing on just one aspect may lead to imbalances and inadequate control over prices.
Conclusion:
- The long-run solution to inflation lies in a comprehensive approach that involves enhancing supply and controlling demand.
- By addressing both factors, policymakers can create a stable economic environment with controlled inflation rates.

To find the average inflation rate over the 7-year period, we need to calculate the average annual inflation rate.
We can do this by using the formula:
Average annual inflation rate = (Ending CPI - Beginning CPI) / Beginning CPI * 100
Given that the period is from 2004-2005 to 2010-2011, we need to find the CPI for these two years.
Let's assume the CPI for the year 2004-2005 is 100 and the CPI for the year 2010-2011 is 120.
Plug these values into the formula:
Average annual inflation rate = (120 - 100) / 100 * 100 = 20 / 100 * 100 = 20%
Therefore, the average annual inflation rate over the 7-year period is 20%.
Now, let's check which option matches the calculated inflation rate:
A: 4%
B: 5%
C: 6%
D: 7%
From the given options, the closest match to the calculated inflation rate is 6%. Therefore, the answer is option C.

False Statement Regarding Disguised Unemployment:
- Marginal productivity of worker is high: This statement is false because disguised unemployment refers to a situation where there are more people engaged in a task or sector than required. In such a scenario, the marginal productivity of each worker is low or even negligible. This means that additional workers do not contribute significantly to the overall output or productivity.
True Statements Regarding Disguised Unemployment:
- Mounting pressure of population in rural areas with no alternative employment: Disguised unemployment is commonly observed in rural areas where the population is high, and there is a lack of alternative employment opportunities. Due to limited job opportunities, more people end up working in a sector or task than required.
- Feature of agrarian economy: Disguised unemployment is often associated with agrarian economies where agriculture is the primary occupation. In such economies, there is a tendency for excessive labor to be engaged in agriculture, leading to disguised unemployment.
- More people are engaged than required: Disguised unemployment occurs when there is an excess supply of labor in a particular sector or task. This means that more individuals are engaged in the work than actually required to achieve the same level of output.
In conclusion, option A is the false statement as the marginal productivity of workers is not high in the case of disguised unemployment.

Potential Labour Force of India
There are several factors that determine the potential labour force of India. These factors include:
1. Those who are willing to work:
- This category includes individuals who are actively seeking employment and are willing to work.
- It encompasses both individuals who are currently unemployed and those who are employed but looking for better job opportunities.
- These individuals play a crucial role in the labour force as they are ready to contribute to the economy.
2. Those who are fit to work:
- This category includes individuals who are physically and mentally capable of performing work.
- It excludes individuals who have physical or mental disabilities that prevent them from participating in the labour force.
- This group comprises individuals who can actively contribute to the workforce and perform various jobs.
3. People in particular age group:
- The potential labour force also includes individuals who fall within the working-age population.
- This age group typically ranges from 15 to 64 years, although the exact age range may vary depending on the country's demographics and policies.
- Individuals within this age group are considered to have the potential to participate in the labour force and contribute to the economy.
4. All of these:
- The answer to the question is option D, which means that all of the above factors contribute to the potential labour force of India.
- The labour force is not limited to a single factor but encompasses those who are willing to work, fit to work, and fall within the particular age group.
In conclusion, the potential labour force of India consists of those who are willing to work, fit to work, and fall within the particular age group. All these factors contribute to the overall labour force and play a vital role in the country's economy.

Underemployment occurs when people are working less than they are capable of. Here is a detailed explanation:
Definition of Underemployment:
Underemployment refers to a situation where individuals are working in jobs that do not fully utilize their skills, education, or qualifications. It implies that they are capable of working more hours or in a higher-skilled position but are unable to do so.
Reasons for Underemployment:
Underemployment can occur due to various factors, including:
1. Lack of available full-time positions: Sometimes, individuals may be unable to find full-time employment opportunities in their field, leading them to settle for part-time or lower-skilled jobs.
2. Economic downturn: During periods of economic recession or slowdown, companies may reduce their workforce or cut back on hiring, resulting in a decreased demand for labor. This can lead to underemployment as workers are unable to find suitable employment options.
3. Education and skill mismatch: Some individuals may have higher qualifications or skills than what is required for the available jobs in the market. As a result, they may end up working in positions that do not fully utilize their abilities.
Impact of Underemployment:
Underemployment can have several negative consequences, including:
1. Wasted potential: When individuals are not able to work up to their full capabilities, their skills and talents go underutilized, leading to a loss of productivity and innovation.
2. Financial instability: Underemployed individuals often struggle to make ends meet as their earnings may not be sufficient to cover their expenses or meet their financial goals.
3. Psychological effects: Underemployment can lead to feelings of frustration, low self-esteem, and job dissatisfaction, as individuals may feel unfulfilled in their current roles.
4. Long-term career implications: Being stuck in underemployment can hinder career growth and advancement opportunities. It may result in a lack of skill development and limited networking prospects.
Conclusion:
Underemployment is a situation where individuals are working below their potential. It can occur due to various factors such as lack of available full-time positions, economic downturns, and education or skill mismatch. Underemployment has negative impacts on individuals' productivity, financial stability, and long-term career prospects.

To analyze the given situation and determine the correct answer, let's break it down into key points:
Overall acceleration in the growth rate of GDP:
- This indicates that the economy is experiencing an increase in the production of goods and services, resulting in a higher Gross Domestic Product (GDP).
Not accompanied by a commensurate expansion in employment opportunities:
- Despite the growth in GDP, the increase in job opportunities is not proportionate or equivalent.
- It means that even though the economy is growing, the employment rate does not experience a similar level of growth.
Now, let's analyze the options:
A. Jobless growth:
- This option perfectly matches the given situation, as it describes a scenario where there is an acceleration in GDP growth without a corresponding expansion in employment opportunities.
- Jobless growth refers to a situation where economic growth occurs without a significant increase in employment.
B. Population growth:
- This option does not directly address the given situation.
- Population growth refers to an increase in the number of individuals in a particular area over time, which might not be relevant to the context of the question.
C. People growth:
- This option is similar to the previous one and does not directly relate to the situation described.
- People growth can be interpreted as an increase in the population, but it does not specifically address the mismatch between GDP growth and employment opportunities.
D. None:
- This option implies that none of the provided options is correct.
- However, based on the analysis above, option A (Jobless growth) is the most appropriate answer.
In conclusion, the correct answer to the given question is A. Jobless growth.

Urban areas suffer most from Open unemployment.
Open unemployment refers to the situation where individuals are actively seeking employment but are unable to find suitable jobs. Urban areas tend to have higher rates of open unemployment due to several factors:
1. Lack of job opportunities: Urban areas often have a higher concentration of job seekers compared to rural areas. However, the number of available jobs may not be sufficient to meet the demand, leading to open unemployment.
2. Structural unemployment: Urban areas may experience structural unemployment, which occurs when there is a mismatch between the skills possessed by job seekers and the skills required by available jobs. This can lead to open unemployment as individuals struggle to find employment that matches their qualifications.
3. Technological advancements: Urban areas are often at the forefront of technological advancements, which can lead to job displacement. Automation and digitization can result in job losses, particularly in industries that rely heavily on manual labor. This can contribute to open unemployment in urban areas.
4. Population growth: Urban areas tend to experience rapid population growth, which can outpace job creation. As the population increases, the demand for jobs also rises, creating a greater likelihood of open unemployment.
5. Informal sector: Urban areas often have a significant informal sector, where individuals engage in unregulated and low-paying jobs. These jobs may not provide stable income or social security benefits, leading to open unemployment as individuals seek more secure and better-paying formal sector jobs.
In conclusion, open unemployment is a major issue faced by urban areas due to factors such as a lack of job opportunities, structural unemployment, technological advancements, population growth, and the prevalence of the informal sector.

The largest employer in India is the Primary sector.
Explanation:
The primary sector includes activities related to natural resources such as agriculture, mining, and fishing. Here's why it is the largest employer in India:
1. Agriculture: India is primarily an agrarian economy, with a significant proportion of its population engaged in agricultural activities. It employs a large number of people, especially in rural areas.
2. Mining: The mining sector in India employs a considerable workforce, particularly in states that have rich mineral resources like coal, iron ore, and limestone.
3. Fishing: With a long coastline and numerous rivers, fishing is an important occupation in India. It provides employment opportunities for a significant number of people, especially in coastal regions.
4. Rural Employment Programs: The Indian government has implemented various rural employment programs such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which aim to provide employment opportunities in the primary sector, particularly for the rural population.
5. Population Distribution: India has a large population, and a significant proportion of it resides in rural areas. As a result, the primary sector becomes a major source of employment for the vast rural workforce.
In conclusion, the primary sector, including agriculture, mining, and fishing, is the largest employer in India due to the country's agrarian economy, natural resource abundance, and the need to provide employment opportunities to the large rural population.