Which Is Not an Example of Creative Destruction

question 58

Multiple Choice

Which is not an example of creative destruction?

• A) A large manufacturing plant closes, and unemployed workers leave town.
• B) Americans retire in Mexico because the cost of living is cheaper.
• C) Call centers are moved from the United States to India and the Philippines.
• D) Medical records go online, eliminating the need for paper files and people to track and organize them.
• E) All of these are examples of creative destruction.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs (both fixed and variable) in the cost of a product.

Operating Income

Earnings from a company's core business operations, excluding expenses and revenues from investments and other non-operational activities.

Variable Costing

An accounting method that only allocates variable production costs to products, excluding fixed costs.

Absorption Costing

A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.