A worker repairing CD and DVD players was laid off because most of his customers have started using Netflix, Apple TV and other streaming services. This worker is now:
Group of answer choices
a. frictionally unemployed.
b. cyclically unemployed.
c. Experiencing creative destruction.
d. a discouraged worker.
e. None of the answers are correct.
The answer is
c) exoeriencing creative destruction
Creative destruction refers to new innovations in product mechanism by which earlier products become outdated and obsolete in the market. The process of creative destruction often leads to structural unemployment, which is the unemployment due to industrial restructuring, mainly due to a shift in technology rather than demand and supply. Here, the shift of technology from CD and DVD to OTT services like Netflix, Apple TV etc is the technological change that causes structural unemployment.
A worker repairing CD and DVD players was laid off because most of his customers have...