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Q.

Disguised unemployment is the state in which a person is able and willing to work at any prevailing wages, but his productivity is:


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a

Zero.

b

Neutral

c

Both 1 and 2

d

None of these  

answer is A.

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Detailed Solution

Disguised unemployment is the state in which a person is able and willing to work at any prevailing wage, but his productivity is zero.
When people work to their full ability, they are made to work less than their potential. This is most prevalent in rural areas where people only practice farming and need labourers. When a farm only needs 3 workers, but 5 labourers are working on it. Instead, the two are said to be in this situation of unemployment. From their point of view, they are working, but their full potential is not accessible.
 
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