As a result of a war in the country of Omega, refugees flee to the country of Alpha to seek employment. Holding other factors constant, the influx of refugees will ________ the real wage in Alpha and ________ employment in Alpha.
A)increase; increase
B)increase; decrease
C)decrease; decrease
D)decrease; increase

Question

Quizplus · Accepted Answer

The work force in Alpha has increased, which increases the supply of labor and puts downward pressure on real wages but increases employment levels in Alpha.

As a Result of a War in the Country of Omega