Define disguised unemployment. State its implications on output and employment in a country.
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Solution and Explanation
Definition: Disguised unemployment refers to a situation where more people are employed than required, resulting in zero or negligible marginal productivity.
Implications: Inefficient Labor Use: Resources are underutilized, and overall economic productivity remains low.
Lower GDP: Excess labor in low-productive sectors like agriculture fails to contribute to GDP growth effectively.
Hidden Unemployment: The extra workforce could be redeployed to other sectors without affecting current output levels.
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