Which of the following summarises the impact of population growth on the labour market?
A)This will increase the labour supply, reduce the equilibrium wage and increase the quantity of labour demanded.
B)There will be an increase in the demand for labour.As a result, the wage rate will rise and the quantity of workers supplied will decrease.
C)There will be an increase in the demand for jobs.This will result in an increase in the equilibrium wage rate and a movement along the labour supply curve.
D)There will be an increase in both the demand for labour and the supply of labour.As a result, the equilibrium wage will not change.

Question

Quizplus · Accepted Answer

Population growth leads to an increase in the labour supply. When the labour supply increases, the equilibrium wage rate falls and the quantity of labour demanded increases. This occurs because an increase in the number of workers means that firms can hire more people at a lower wage rate, leading to an increase in the quantity of labour demanded. Therefore, option A is the most accurate summary of the impact of population growth on the labour market.

Which of the Following Summarises the Impact of Population Growth