Question

Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from those given below: Assertion (A): Voluntarily unemployed people are those able-bodied people who are not willing to work at the prevailing wage rate. Reason (R): There exists zero involuntary unemployment at full employment level of equilibrium.

• A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
• B. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
• C. Assertion (A) is true, but Reason (R) is false.
• D. Assertion (A) is false, but Reason (R) is true.

Hint:

Voluntary unemployment is different from involuntary unemployment as it results from personal choice rather than lack of job opportunities.

Answer 1

The Correct Option is B

Voluntary unemployment occurs when individuals choose not to work at the prevailing wage rate, even though they are capable of working. This could be due to personal preferences, job dissatisfaction, or expectations of higher wages. Full employment equilibrium refers to a state where all willing and able workers are employed, and only voluntary unemployment exists. Involuntary unemployment is absent at this stage, meaning anyone who wants a job at the prevailing wage rate can find one. Conclusion: While both statements are true, the Reason (R) does not directly explain Assertion (A), hence option (B) is correct.