The argument that technological change creates jobs assumes that:

Question

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The argument that technological change creates jobs is based on the theory of factor substitution, which states that as technology improves, the relative prices of labor and capital change, leading firms to substitute capital for labor. However, this also leads to an increase in the productivity of labor, which leads to increased output and higher demand for labor in other industries. This is known as the factor output effect, and it is believed to outweigh the factor substitution effect, resulting in a net increase in employment.

The Argument That Technological Change Creates Jobs Assumes That