How Will an Increase in Labour Productivity Affect Equilibrium in the Labour

question 189

Multiple Choice

How will an increase in labour productivity affect equilibrium in the labour market?

• A)The supply of labour will increase and the equilibrium wage and quantity of labour will increase.
• B)The demand for jobs will increase and the equilibrium wage and quantity of labour will increase.
• C)The demand for labour will increase and the equilibrium wage and quantity of labour will increase.
• D)The demand for labour will decrease because fewer workers will be needed to produce the same output.The equilibrium wage and quantity of labour will decrease.

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Definitions:

Time Value

The idea that having money presently is more valuable than possessing an identical sum later on because of its capacity to generate earnings.

Systematic Risk

The risk inherent to the entire market or market segment, also known as market risk, which cannot be mitigated through diversification.

Diversification

The process of allocating investments among various financial assets to reduce risk and improve potential returns.

Diversifiable Risk

A risk that can be reduced or mitigated through the diversification of investments in a portfolio.