20 MCQs on Poverty and Unemployment: Causes, Types & Solutions

Test your knowledge with 20 MCQs on poverty and unemployment, covering causes, consequences, and solutions. Perfect for students, UPSC aspirants, and competitive exams!

1. What is the most widely used measure of poverty in India?

A) Consumer Price Index (CPI)
B) Gross Domestic Product (GDP)
C) Below Poverty Line (BPL)
D) Human Development Index (HDI)

Answer: C) Below Poverty Line (BPL)
Explanation: The BPL classification is used to identify households in need of government assistance in India.

2. Which of the following is NOT a cause of poverty?

A) Low levels of education
B) Economic inequality
C) High industrial growth
D) Unemployment

Answer: C) High industrial growth
Explanation: High industrial growth generally leads to job creation and economic development, which can help reduce poverty.

3. The Great Depression of the 1930s is an example of which type of unemployment?

A) Structural unemployment
B) Cyclical unemployment
C) Seasonal unemployment
D) Frictional unemployment

Answer: B) Cyclical unemployment
Explanation: Cyclical unemployment occurs due to economic downturns, as seen during the Great Depression.

4. Absolute poverty refers to:

A) The inability to meet basic needs like food, clothing, and shelter
B) A comparison of income levels within a society
C) Temporary financial instability
D) The absence of luxury goods

Answer: A) The inability to meet basic needs like food, clothing, and shelter
Explanation: Absolute poverty is measured based on a fixed threshold of essential living conditions.

5. Which government program aims to provide rural employment in India?

A) Startup India
B) MGNREGA
C) Ayushman Bharat
D) Beti Bachao Beti Padhao

Answer: B) MGNREGA
Explanation: The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides guaranteed wage employment to rural households.

6. What is disguised unemployment?

A) When people are actively searching for jobs but unable to find one
B) When people are working in a job but their productivity is negligible
C) When people lose jobs due to economic recessions
D) When people voluntarily leave their jobs

Answer: B) When people are working in a job but their productivity is negligible
Explanation: Disguised unemployment is common in agriculture, where more people are engaged in a task than necessary.

7. The poverty line in India is determined based on:

A) Income level and consumption expenditure
B) Education level
C) Employment status
D) Land ownership

Answer: A) Income level and consumption expenditure
Explanation: The poverty line in India is based on the minimum income or expenditure required to meet basic necessities.

8. Which of the following is a structural cause of unemployment?

A) A worker switching jobs
B) A factory shutting down due to an economic recession
C) A shift from manufacturing to automation reducing labor demand
D) A farmer unable to work due to bad weather

Answer: C) A shift from manufacturing to automation reducing labor demand
Explanation: Structural unemployment occurs when workers’ skills no longer match available jobs due to technological advancements.

9. Which of the following schemes is focused on urban employment generation?

A) MGNREGA
B) PM-KISAN
C) PM SVANidhi
D) Pradhan Mantri Awas Yojana

Answer: C) PM SVANidhi
Explanation: The PM SVANidhi scheme provides loans to street vendors to help them sustain their livelihoods in urban areas.

10. What is relative poverty?

A) Lack of basic needs
B) Comparison of income with societal standards
C) Homelessness
D) Unemployment benefits

Answer: B) Comparison of income with societal standards
Explanation: Relative poverty refers to individuals being poor in comparison to the average living standards of society.

11. The concept of "poverty trap" refers to:

A) Sudden economic downfall
B) A situation where the poor remain poor due to structural factors
C) Lack of education
D) Government inefficiency

Answer: B) A situation where the poor remain poor due to structural factors
Explanation: The poverty trap occurs when economic disadvantages prevent upward social mobility.

12. Which international organization publishes the Global Multidimensional Poverty Index (MPI)?

A) World Bank
B) United Nations Development Programme (UNDP)
C) International Monetary Fund (IMF)
D) World Economic Forum (WEF)

Answer: B) United Nations Development Programme (UNDP)
Explanation: The UNDP publishes the MPI, which measures poverty using multiple indicators, including health, education, and standard of living.

13. What is seasonal unemployment?

A) When people lose jobs due to economic crises
B) When employment opportunities fluctuate with seasons
C) When people choose to remain unemployed
D) When skilled labor is in high demand

Answer: B) When employment opportunities fluctuate with seasons
Explanation: Seasonal unemployment occurs in industries like agriculture and tourism, where jobs are available only during certain times of the year.

14. Which of the following is an economic consequence of unemployment?

A) Increase in literacy rates
B) Decline in GDP growth
C) Political stability
D) Decrease in inflation

Answer: B) Decline in GDP growth
Explanation: High unemployment reduces productivity and economic output, negatively affecting GDP growth.

15. What does "working poor" mean?

A) People who refuse to work
B) People who are unemployed but receiving benefits
C) People who work but still live below the poverty line
D) People who work in high-paying jobs

Answer: C) People who work but still live below the poverty line
Explanation: The working poor are employed individuals whose earnings are insufficient to escape poverty.

16. Which sector in India experiences the highest disguised unemployment?

A) IT sector
B) Manufacturing sector
C) Agricultural sector
D) Service sector

Answer: C) Agricultural sector
Explanation: The agriculture sector in India has more workers than required, leading to disguised unemployment.

17. Unemployment due to workers lacking necessary skills is known as:

A) Cyclical unemployment
B) Structural unemployment
C) Seasonal unemployment
D) Frictional unemployment

Answer: B) Structural unemployment
Explanation: Structural unemployment arises when job seekers' skills do not match the skills required by employers.

18. The unemployment rate is calculated as:

A) (Total unemployed / Total population) × 100
B) (Total unemployed / Labor force) × 100
C) (Total employed / Total population) × 100
D) (Labor force / Total population) × 100

Answer: B) (Total unemployed / Labor force) × 100
Explanation: The unemployment rate measures the percentage of unemployed individuals within the labor force.

19. Which of the following is an effective poverty alleviation measure?

A) Reducing education funding
B) Increasing minimum wages
C) Encouraging child labor
D) Decreasing access to credit

Answer: B) Increasing minimum wages
Explanation: Higher minimum wages can help reduce poverty by ensuring workers earn a livable income.

20. The term "informal employment" refers to:

A) Government jobs
B) Jobs with no formal contracts or social security benefits
C) Permanent employment in the private sector
D) High-paying managerial positions

Answer: B) Jobs with no formal contracts or social security benefits

Explanation: Informal employment includes daily wage labor and self-employment without legal protections.