The quantity of labor demanded depends on the

Question

Quizplus · Accepted Answer

The quantity of labor demanded depends on the real wage rate, which is the money wage rate adjusted for inflation or the purchasing power of wages. This means that employers consider not only the amount of money they have to pay their workers, but also how much those wages can buy in terms of goods and services. As the real wage rate increases, employers are willing to hire more workers because their productivity increases and the cost of labor becomes relatively cheaper compared to other inputs like capital. Therefore, option D is the correct answer.

The Quantity of Labor Demanded Depends on the