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When the Quantity of Labour Demanded Exceeds the Quantity of Labour

Question 23

Multiple Choice

When the quantity of labour demanded exceeds the quantity of labour supplied, the real wage rate


A) does not change, but the money wage rate rises to eliminate the labour market shortage.
B) rises to eliminate the labour market surplus.
C) falls to eliminate the labour market shortage.
D) rises to eliminate the labour market shortage.
E) falls to eliminate the labour market surplus.

Correct Answer:

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