What Are Some Different Transmission Mechanisms Through Which Negative Agricultural

question 19

Multiple Choice

What are some different transmission mechanisms through which negative agricultural shocks affect India's GDP? I. Declines in agricultural output reduce GDP. II. A fall in agricultural output causes lower incomes for farmers who consume fewer goods and services causing GDP to fall even further. III. Declines in the agricultural sector cause declines in the purchases of agricultural equipment.

• A) I only
• B) I and II only
• C) II and III only
• D) I, II, and III

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Definitions:

Unemployment Rate

The share of the labor market that is unoccupied but searching for jobs.

Cyclical Unemployment

Unemployment that arises during periods of economic downturn or recession, reflecting the overall health of the economy rather than individual or structural factors.

Frictional

Pertaining to the period of time and inefficiency in processes where resources, especially labor, move from one employment to another, contributing to transient joblessness.

Unemployment Rate

The portion of the labor market that is out of work and actively pursuing job opportunities.