Which one among the following statements is not correct?
When the economy grows slowly than its potential, the unemployment rate rises.
Structural employment occurs when jobs are eliminated by changes in demand for particular goods or due to automation.
Recession in the economy leads to cyclical unemployment.
At full employment, the measured unemployment rate is negative.
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC CAPF – 2021
– B) Structural employment occurs when jobs are eliminated by changes in demand for particular goods or due to automation. This is correct. Structural unemployment arises from a mismatch between the skills of workers and the requirements of available jobs, often caused by technological changes or shifts in the structure of the economy.
– C) Recession in the economy leads to cyclical unemployment. This is correct. Recessions are downturns in the business cycle, during which demand for goods and services falls, leading firms to reduce production and lay off workers, causing cyclical unemployment.
– D) At full employment, the measured unemployment rate is negative. This is incorrect. Full employment does not mean zero unemployment. It refers to a situation where there is no cyclical unemployment. The unemployment rate at full employment is equal to the natural rate of unemployment, which includes frictional and structural unemployment. The natural rate of unemployment is always positive. The measured unemployment rate cannot be negative; the lowest possible rate is zero.