An increase in the supply of capital, which is a substitute to labour, will lead to a decrease in the demand for labour.

Name: An increase in the supply of capital, which is a substitute to labour, will lead to a decrease in the demand for labour.
Brand: Quizplus
Rating: 4.8 (40 reviews)

Question

Quizplus · Accepted Answer

An increase in the supply of capital means that firms can substitute capital for labor, leading to a decrease in the demand for labor. This is because firms can now produce the same amount of goods with a smaller amount of labor.

An Increase in the Supply of Capital, Which Is a Substitute