Holding other factors constant, if a larger proportion of the population enters the labor force as a result of a growing social acceptance of women working, then the real wages of workers will ______ and employment of workers will _____.
A)increase; increase
B)increase; decrease
C)decrease; not change
D)decrease; increase

Question

Quizplus · Accepted Answer

With more people entering the labor force, the supply of labor increases, which tends to decrease real wages. However, employment increases as more people are available to work.

Holding Other Factors Constant, If a Larger Proportion of the Population