If labor supply and labor demand both increase,employment

Question

Quizplus · Accepted Answer

When both labor supply and labor demand increase, it is likely that employment will increase as well. However, the effect on the real wage rate cannot be determined without knowing the magnitude of the shifts. If the increase in labor supply is greater than the increase in labor demand, the real wage rate will likely fall. Conversely, if the increase in labor demand is greater than the increase in labor supply, the real wage rate will likely increase. Therefore, the effect on the real wage rate will depend on the relative magnitude of the shifts in labor supply and demand.

If Labor Supply and Labor Demand Both Increase,employment