In a rapidly growing economy, a change in technology which is labour saving is likely to cause

  • A residual unemployment
  • B structural unemployment
  • C disguised unemployment
  • D frictional unemployment

The correct answer is B. structural unemployment

Structural unemployment occurs when there is a mismatch between the skills and qualifications of workers and the requirements of available jobs.

It results when there is a change in the structure of an industry or economy, often due to technological advancements, which make certain skills obsolete.

To explain why changes in labour-saving technology are likely to lead to structural unemployment, consider this: When labour-saving technology is introduced in a rapidly growing economy, it often leads to changes in the nature of work and the skills required for certain jobs. 

As a result, some jobs may become obsolete or less in demand, leading to unemployment for workers who do not possess the necessary skills to adapt to the new technological advancements.

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