Read the extract and answer the following question.
Unemployment is a situation where people who are willing and able to work do not find any work. Unemployment is a waste of human resource, as it reduces the productivity and income of the people and the country. Unemployment also affects the quality of life and well-being of the people, as it causes poverty, frustration, depression and social problems.
Unemployment can have various causes and effects, depending on the nature and duration of the problem. For example, some workers may face unemployment during certain seasons when their work is not in demand. Some workers may be employed but not fully utilized, resulting in low output and income. Some workers may have education but not the skills or experience required by the employers. Some workers may lose their jobs due to changes in technology, market conditions or consumer preferences. Some workers may experience unemployment due to fluctuations in the business cycle and economic activity.
In India, unemployment is a major problem, especially in rural and urban areas. In rural areas, there is seasonal and disguised unemployment due to the dependence on agriculture and lack of alternative employment opportunities. In urban areas, there is educated unemployment due to the mismatch between the supply and demand of skilled labour and the slow growth of industries and services. Unemployment in India affects the human capital formation and economic development of the country. Therefore, there is a need to create more employment opportunities in both rural and urban areas by promoting education, training, entrepreneurship, industrialization, diversification etc.
What are the two types of unemployment that are prevalent in rural and urban areas of India respectively? Explain how they are caused. (2 marks)