According to Classical Economics, if the demand for labor in the entire economy falls:
A) The equilibrium wage will fall.
B) The supply of labor will rise.
C) The supply of labor will fall.
D) The equilibrium wage will rise.

Question

Quizplus · Accepted Answer

According to the classical economic theory, if the demand for labor in the entire economy falls, there will be an excess supply of labor, resulting in a decrease in the equilibrium wage rate. This is because fewer firms are willing to hire workers, and therefore, workers will have to accept lower wages to find employment.

According to Classical Economics, If the Demand for Labor in the Entire