Fears of an impending civil war in Baltonia have reduced the confidence of potential investors.Assuming all else equal,which of the following is likely to happen in this case?
A) The demand for labor in Baltonia will fall.
B) The equilibrium real wage in Baltonia will rise.
C) The consumption expenditure in Baltonia will rise.
D) The supply of labor in Baltonia will fall.

Question

Quizplus · Accepted Answer

Fears of an impending civil war would likely deter investment, leading to a decrease in business activity and thus a reduced demand for labor.

Fears of an Impending Civil War in Baltonia Have Reduced