Higher wages in the European car industry would __________ the prices of European-made cars and __________ the quantity traded.

Question

Quizplus · Accepted Answer

If wages in the European car industry increase, the cost of producing cars also increases. Therefore, the prices of European-made cars would rise as the companies would need to pass on this cost increase to consumers, resulting in lower demand for European-made cars and therefore a decrease in the quantity traded.

Higher Wages in the European Car Industry Would __________ the Prices