Question

what is involuntary unemployment? ​

Answer 1

Answer:

Involuntary unemployment occurs when a person is willing to work at the prevailing wage yet is unemployed. Involuntary unemployment is distinguished from voluntary unemployment, where workers choose not to work because their reservation wage is higher than the prevailing wage.

Answer 2

Involuntary unemployment is a situation in which a capable person with physical and mental fitness is ready to work at the present wage rate but still does not get a work opportunity.

• The reasons for involuntary unemployment are:

1. Deficiency of aggregate demand

2. Inflexibilities observed in the labour market

3. Rigidity of wages

4. Scarcity of jobs

• Voluntary unemployment is another type of unemployment which is just the opposite of involuntary unemployment.

• Voluntary unemployment is a situation in which a person decides not to work in spite of getting job opportunities due to a lower wage rate or unsuitable position.