Case study on unemployment.

Many Theories are given by different expert to explain the reasons behind unemployment. One
reason of unemployment may be downswings (periods of recession) in the business cycle.
Another reason behind wide-scale unemployment refers to structural unemployment. Structural
unemployment arises from longer-term changes in the economy, affecting specific industries, regions
and occupations. Structural unemployment often explains regional unemployment. Some industries
in India have lost their business and so employment to the cheaper imports coming from abroad.
Some experts explain that new technology is a cause of unemployment which is also known as
technological unemployment. The argument is that the introduction of new technology is destroying
jobs and business while at the same time imports from low-wage developing countries are
undercutting goods produced in this country.
However, many studies may contradict this also. New technologies generally help in producing new
products, or services and therefore new areas of employment. Sometimes lesser workers may be
required in some areas of production where specific tasks are taken over by machines, but rising
productivity boosts overall income and then the demand for new jobs in the economy as a whole.

Q1: What are the main causes of Unemployment? Do you agree that technological up-
gradation in any industry may cause unemployment in that industry? Provide your opinion
with one example. (2.5 Marks)
Q2: Structural unemployment in many countries has touched its highest peak during corona
pandemic, but it seems that most of the industries in KSA are not that affected. Discuss the role
of the Saudi Government in reducing the impact of Corona pandemic on employment in Saudi
Arabia. (2.5 Marks)

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