Question

1. Structural Unemployment is a result of what kind of labour practice and business environment?

1. Wage Rigidity
2. Job Rationing
3. Both A and B
4. None of Above

Answer 1

ANS

Option D. Structural unemployment is the unemployment which is caused due to restructuring of the organizational structure, and the reason for the unemployment is the mismatch between the skills that employers want and the skills that employees posses. This unemployment has no effect of demand and supply of labours and thhe wage rates that are prevailing in the market or in the organization. Option A is wrong as wage rigidity causes unemployment due to fixation of wages which forces the suppliers to pay higher wages and due to which they hire less and Option B is wrong as Job Rationing is the situation when the real wage is above the equilibrium level of wages.