What Best Explains Why the Real Wage Is Always Driven

question 310

Multiple Choice

What best explains why the real wage is always driven to the subsistence level in the classical model?

• A) Population growth occurs, shifting the labor supply curve leftward.
• B) Growth is not possible so the demand for labor never changes.
• C) Population growth occurs, increasing the supply of labor.
• D) Investment in capital decreases labor demand, decreasing the demand for labor.

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Definitions:

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life.

Accounts Payable

Liabilities of a business that are due to creditors within a short period, typically less than a year.

Net Cash

The amount of cash available after all cash inflows and outflows have been accounted for, often within a specific reporting period.

Sale Of Equipment

The act of selling off machinery, tools, or devices used in production or office operations, often recorded as a cash inflow in financial accounts.