An Increase in the Population and Hence the Supply of Labor

question 13

Multiple Choice

An increase in the population and hence the supply of labor causes a

• A) shortage of labor at the original real wage rate and the real wage rate will fall.
• B) surplus of labor at the original real wage rate and the real wage rate will rise.
• C) surplus of labor at the original real wage rate and the real wage rate will fall.
• D) shortage of labor at the original real wage rate and the real wage rate will rise.

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Definitions:

Foreign Trade

The exchange of goods, services, and capital between countries, crossing national borders.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, leading to widespread unemployment and poverty.

Stock Market Speculation

The act of trading stocks, commodities, or other financial instruments with the aim of making profits from short-term fluctuations in their prices, often involving high risk.

Protective Tariffs

Tariffs imposed on imports to protect domestic industries from foreign competition by increasing the cost of imported goods.