Larger increases in the demand for labor than in the supply of labor explain:
A)the substantial increase in real wages.
B)the slowdown in real wage growth.
C)increasing wage inequality.
D)skill-biased technological change.

Question

Quizplus · Accepted Answer

When both labor supply and labor demand rise at the same time, it is certain that quantity will increase but uncertain whether wages will rise or fall. If wages rise, we know the demand shift was larger than the supply shift.

Larger Increases in the Demand for Labor Than in the Supply