UPSC PRELIMINARY MOCK TEST 116
- Represents equilibrium between the state of the economy and the labour market
- Is the specific level of unemployment at which inflation does not rise in an economy
- Is also referred to as the long-run Phillips curve
1 and 2 only
2 and 3 only
1, 2 and 3
All three statements are correct.
- In 1958, New Zealand born economist William Phillips wrote a paper titled The Relation between Unemployment and the Rate of Money Wage Rates in the United Kingdom. In his paper, Phillips described the supposed inverse relationship between unemployment levels and the rate of inflation. This relationship was referred to as the Phillips curve.
- However, during the severe recession of 1974 to 1975, inflation and unemployment rates both reached historic levels and people began to doubt the theoretical basis of the Phillips curve. Milton Friedman and other critics argued that government macroeconomic policies were being driven by a low unemployment target and that caused the expectations of inflation to change. This led to accelerated inflation rather than reduced unemployment. It was then agreed that government economic policies should not be influenced by unemployment levels below a critical level also known as the "natural rate of unemployment."
- The NAIRU was first introduced in 1975 as the noninflationary rate of unemployment (NIRU), which was an improvement of the concept of "natural rate of unemployment" by Milton Friedman.
Improvisation: TH: What is hysteresis ; "
- The Indian Air Force's fighter squadron strength requirement will be met if the deal is signed.
- A key feature of the Rafale is its capability to be equipped with the Beyond-Visual-Range meteor air-to-air missile, with a range in excess of 150 kilometers.
Both 1 and 2
Neither 1 nor 2
The Indian Air Force's fighter squadron strength requirement will still not be met even if the deal is signed. The requirement is at least 42 squadrons, whereas it has 33 at present. The Rafale deal will ensure 2 more squadrons (each squadron consists of around 18 fighters). See image:
Page 12, The Hindu, 23rd September 2016;
- It is a statutory body, and is one of the largest social security organizations in India in terms of volume of financial transactions undertaken and number of covered beneficiaries.
- It works under the overall aegis of the Ministry of Finance.
- It administers a compulsory contributory Provident Fund Scheme, Pension Scheme and Insurance Scheme.
1, 2, 3
The Employees' Provident Fund Organisation, a statutory body, is one of the largest social security organizations in India in terms of volume of financial transactions undertaken and number of covered beneficiaries.
o It works under the overall aegis of the Ministry of Labour and Employment.
o The main functions of the EPFO: Administers a compulsory contributory Provident Fund Scheme, Pension Scheme and Insurance Scheme.
Ministry of housing and urban affairs
Ministry of corporate affairs
large number of people remain unemployed
alternate employment is not available
marginal productivity of labour is zero
productivity of workers is low