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Answer» Economic effects of unemployment: - Waste of human resources: Human resources are wasted due to unemployment in the country. These resources could have been used in the production activity of the economy.
- Difficult to implement welfare schemes: Due to corruption and malpractices, it is difficult to implement various welfare schemes introduced by the government from time to time.
- Poverty and Income inequality: Lack of employment leads to poverty and income inequality in the economy.
- Growth of informal sector: Due to unemployment, poverty increases in the economy which will attract the growth of informal sectors like smuggling, drug peddling, black marketing, etc.
- High dependency ratio: When unemployment increases in an economy, it will lead to an increase in dependency ratio.
- The unemployed group will become the burden on the employed group.
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