Which of the following statements is true of creative destruction?
A) Creative destruction is generally bad for an economy.
B) Creative destruction is encouraged in economies with extractive institutions.
C) Creative destruction creates losses for some economic agents and benefits for others.
D) Creative destruction is a phenomenon that was prevalent before 1800.

Question

Quizplus · Accepted Answer

Creative destruction is a process where new innovations or technologies replace old ones, leading to the demise of less efficient firms or industries. While it creates losses for some economic agents, it can also bring benefits to others, and spur overall growth and development in the long run. It is not generally bad for an economy, but rather seen as a necessary process for progress. It is more likely to occur in economies with inclusive institutions that encourage innovation and competition. Finally, while creative destruction has been a recurring phenomenon throughout history, it is not limited to any particular time period.

Which of the Following Statements Is True of Creative Destruction