Question

Lewis's dual economy model argues that wages remain stagnant in the modern sector until surplus labour in the traditional sector is fully absorbed in the modern sector, a condition often unmet in India due to

• A. Falling farm productivity
• B. Disguised unemployment
• C. Labour scarcity
• D. Decline in unorganised sector

Hint:

Lewis's Dual Economy Model is based on:
• Surplus labour in agriculture.
• Constant industrial wages.
• Transfer of labour from agriculture to industry.
• Economic growth through industrial expansion. The model assumes the existence of disguised unemployment in the traditional agricultural sector.

Answer 1

The Correct Option is B