Question

Technological advancement creates unemployment in firms that shut down or labor that is laid off. Wealth in this case is a. ​Destroyed, since firms are shutting down and production of certain goods and services decreasing b. ​Created, since the dislocated labor and resources are absorbed by new firms created through the technological innovation, moving them to higher value use c. ​Destroyed, since technological progress is leading to higher unemployment d. ​None of the above

Answer 1

Answer:

​Created, since the dislocated labor and resources are absorbed by new firms created through the technological innovation, moving them to higher value use.

Explanation:

Technological advancement results in more efficient processes that requires a unique expertise along with higher compensation.

In this scenario labour is disengaged from closed businesses and some were laid off.

These disengaged workers will eventually develop skills that will give them employment in the technologically advanced companies.

Since wages are higher in these companies, there will be an increase in the wealth of workers.

For example a factory worker in production line is paid less than a software engineer. This is because the work of a software engineer is more specialised and therefore higher paying.