What type of unemployment results from long-term changes in demand and production methods, leading to a permanent fall in the need for a particular type of labor?

The correct answer is structural unemployment. This type of unemployment arises when there are significant changes in the economy that affect the demand for certain skills or types of labor. These changes could include advancements in technology, shifts in consumer preferences, or changes in production processes that make certain skills obsolete. As a result, workers in industries that are declining may find it difficult to find new jobs, not because they are temporarily without work, but because their specific skills are no longer in demand.

Structural unemployment can occur on a large scale and often requires a workforce adjustment or re-skilling programs to help affected workers transition to new roles in growing sectors of the economy. Unlike frictional unemployment, which is temporary and relates to the normal turnover of employment, or seasonal unemployment that arises from fluctuations related to specific seasons or cycles, structural unemployment is more permanent and indicative of deeper changes within the economy. It reflects a mismatch between the skills workers possess and the skills required by employers in the labor market.

Demand deficient unemployment, on the other hand, occurs when there is insufficient demand for goods and services in the economy, leading to a reduction in employment across various sectors. This is usually viewed as cyclical unemployment rather than structural.