Which term refers to workers who are employed when the economy is booming and laid off when not in demand?

Which term refers to workers who are employed when the economy is booming and laid off when not in demand?

• A. Reserve army of labour
• B. Lifestyle
• C. Racism
• D. Institutional racism

Answer: (A)

The idea being tested is the notion of a pool of workers who can be drawn into or released from work as the economy expands or contracts. This pool is known as the reserve army of labour. In boom times, demand for workers rises, so many of these unemployed or underemployed people get jobs. In downturns, employers can hire fewer workers or lay off those who aren’t essential, increasing unemployment until demand strengthens again. This concept helps explain why unemployment fluctuates with the business cycle and why wages can be kept relatively flexible under capitalism. The other terms refer to social attitudes or systems, not to a flexible labor pool: lifestyle is about patterns of living, while racism and institutional racism involve prejudice or structural discrimination, not the economic mechanism of mobilizing labor.

The idea being tested is the notion of a pool of workers who can be drawn into or released from work as the economy expands or contracts. This pool is known as the reserve army of labour. In boom times, demand for workers rises, so many of these unemployed or underemployed people get jobs. In downturns, employers can hire fewer workers or lay off those who aren’t essential, increasing unemployment until demand strengthens again. This concept helps explain why unemployment fluctuates with the business cycle and why wages can be kept relatively flexible under capitalism. The other terms refer to social attitudes or systems, not to a flexible labor pool: lifestyle is about patterns of living, while racism and institutional racism involve prejudice or structural discrimination, not the economic mechanism of mobilizing labor.