Gujarat BoardEnglish MediumSTD 12 CommerceEconomicsUNEMPLOYMENT3 Marks
Question
Explain the concept of cyclical unemployment.
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Answer
Cyclical unemployment:
In capitalist developed countries, cyclical unemployment arises due to fluctuations in opportunities of employment on account of speculative trends of market.
E.g. If the economy is passing through the economic boom, opportunities for employment and production increase. As a result, few people remain unemployed.
On the contrary, if the economy is passing through depression, factories are closed, production decreases and opportunities for employment is also decreases.
People have to remain unemployed in large number.
Such employment is connected with phases of cycle of trade.
If the economy based on market system, we often find such unemployment based on depression in economy.
In $1929-1930,$ there was Great Depression and its effect was seen in many countries that is why it is known as Greatest Depression of the world.
America, England, Europe, etc. many developed countries are still facing unemployment problems. India is also globalized so whatever effects the other countries have, it is directly affect on India.
so cyclical unemployment is seen in India.
The commodities which are demanded at international level in that sector unemployment is found.
E.g. Diamond industry in India.
Cyclical unemployment is for short time period.
To solve such unemployment many state level manufacturing and developmental programmes investment is done, Job opportunities are created for unemployed individuals.
As they get income opportunities their income increases.
In whole economy, demand for commodity grows with increase in production demand for employment will increased.
By this way cyclical unemployment problem will be resolved.
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