This example of unemployment is associated with <em>"Structural Unemployment"</em>. This type of unemployment is related to changes in market conditions. In this case, the greater demand for cars has made it necessary to improve the production process in order to increase the output of new cars. This automated process aims to achieve this at a lower cost, in comparison to having several employees whose total wage bill is probably higher than the operating costs of the new machines.
President Hoover responded cautiously to the Great Depression because he "A. thought that the business cycle would correct itself," mostly because it was impossible at that point to know the extent to which the depression would develop.
