When the automobile replaced horse-drawn carriages as the principal means of transportation, firms producing horse-drawn carriages went bankrupt and permanently laid off all their workers, thereby increasing
A) cyclical unemployment.
B) structural unemployment.
C) frictional unemployment.
D) frictional and cyclical unemployment.

Question

Quizplus · Accepted Answer

This situation represents structural unemployment, as it is caused by a shift in the economy towards a different type of technology, leading to the permanent loss of jobs in a particular industry.

When the Automobile Replaced Horse-Drawn Carriages as the Principal Means