35. Select the correct statement about the "unemployment trap".

1. A situation in the economy when the rate of employment growth is less than the rate of increase in the unemployed population.

2. A situation of frictional unemployment when there is a heavy rush of labour force from primary to secondary activities.

3. A situation when existing job loss is higher than the new jobs created.

4. A situation where unemployed population of an economy feels discouraged to become employed, when opportunity cost of going to work is higher than the income received.

Correct Answer :

A situation where unemployed population of an economy feels discouraged to become employed, when opportunity cost of going to work is higher than the income received.