An economist in a foreign land observes that the earnings of college graduates have increased relative to the earnings of high school graduates.Over the same period,the relative number of college graduates has gone down.Which of the following explanations is consistent with these two observations? The increase in earnings inequality between high school and college graduates
A) is due to technical change making college graduates more productive relative to high school graduates.
B) is due to an increase in the demand for college graduates relative to high school graduates.
C) is due to the increase in cost of going to college.
D) is due to an increase in the returns to a college education.
Correct Answer:
Verified
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