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What Are the General Equilibrium Effects Between Labor Markets and Housing

Question 30

Multiple Choice

What are the general equilibrium effects between labor markets and housing markets following an increase in labor demand?


A) As workers' wages increase, more people move into an area, driving up housing prices. The rising housing prices slow the migration of workers to an area.
B) An increase in labor demand will cause a larger wage reduction in areas with an elastic housing supply than with an inelastic housing supply.
C) An increase in labor demand will cause a larger wage increase in areas with an elastic housing supply than with an inelastic housing supply.
D) An increase in labor demand will cause a larger increase in employment in areas with an inelastic housing supply than with an elastic housing supply.

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