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Q.

A situation where everyone is working but their labour effort is divided and no one is fully employed is called ____


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Detailed Solution

Underemployment is a situation where everyone is working, but their labour effort is divided, and no one is fully employed. To understand, let's assume there is a family of five, and all of them are working on a farm as there are no other opportunities for work. Although none of the members remains idle, their labour effort is divided. The production will have no impact even if we remove a few members, so no one is fully employed. In this kind of unemployment, a person cannot realize his full potential.
 
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