Unemployment resulting from physical or mental deficiency is known as……………unemployment.

Analyze the question: It asks for the type of unemployment caused by physical or mental deficiency (for example, disability or illness that makes a person hard to employ).

Explain the concept: Economists classify unemployment by its cause:

• Cyclical (demand-deficient): Caused by a downturn or depression in the business cycle, when aggregate demand falls.
• Disguised (underemployment): Too many workers are doing a job that fewer could do. This is common in Nigerian agriculture, where extra family members on a farm add nothing to output.
• Frictional: Short-term unemployment while workers move between jobs or search for new ones.
• Residual (also called "chronic" or "handicap" unemployment): Unemployment of people who cannot work or are hard to employ because of physical or mental deficiency, such as disability, old age, or chronic illness.
• Voluntary: The person chooses not to work at the going wage rate.

Solution:

1. The cause is a physical or mental deficiency, which is a personal limitation and not a demand problem or a job-search delay.
2. It is not cyclical, because it has nothing to do with the business cycle.
3. It is not disguised, because it is not about surplus labour in a job.
4. It is not frictional, because it is not a temporary gap between jobs.
5. It is not voluntary, because the person does not simply refuse to work. The limitation is beyond their control.
6. This matches residual unemployment, which covers those who are unemployable or hard to employ because of personal handicaps.

Correct answer: D. Residual

Tip: Think of "residual" as "what is left over" after all the other causes are removed. These are people left out of the job market by physical or mental conditions. Also remember that frictional means "in between jobs" and cyclical means "recession".