UPSC General Studies Sample Paper General Studies Sample Paper-9

  • question_answer
    Consider the following characteristics.                                                     
    1. An extremely low aggregate demand in the economy, which causes productive activities to decelerate. 
    2. The employment avenues start shrinking forcing unemployment rate to grow fast.                
    3. To keep the business going, production houses go for forced labour cuts or retrenchment,          
    Above mentioned characteristics are which of the following economic condition?           

    A)  Economic boom

    B)         Economic recovery  

    C)  Economic depression     

    D)  Recession     

    Correct Answer: C

    Solution :

    [c] Economic recovery and boom are upturn from low demand and reaching the peak demand, So, the option [a] and [b] are eliminated based on the first Statement 1 itself. From, remaining two, we can eliminate option [d] from Statement 2 and 3. Because in recession, it is high unemployment. So, starting of the unemployment is the character of depression.

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