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
i. seasonal unemployment.
ii. structural unemployment.
iii. cyclical unemployment.

Question

Quizplus · Accepted Answer

ii. Structural unemployment occurs when there is a long-term decline in demand for a particular type of job due to changes in the economy or technological advancements. In this case, the shift from horse-drawn carriages to automobiles represents a structural change in the economy, leading to structural unemployment for those who worked in the carriage industry.

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