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    Question

    Which of the following conditions characterizes

    disguised unemployment?
    A When the marginal productivity of labour is greater than one. Correct Answer Incorrect Answer
    B When the marginal productivity of labour is zero. Correct Answer Incorrect Answer
    C When the marginal productivity of labour is greater than two. Correct Answer Incorrect Answer
    D When the marginal productivity of labour is greater than one and less than two Correct Answer Incorrect Answer

    Solution

    Disguised unemployment occurs when extra workers are employed without any increase in production, implying that their marginal productivity is zero.

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