-Refer to the above figure. Which panel represents what happens in the foreign job market in the short-run when U.S. firms substitute labor outside of the U.S. for labor inside the U.S.?

Question

Quizplus · Accepted Answer

Panel B illustrates an increase in demand for foreign labor, which is consistent with what happens when U.S. firms start substituting labor outside of the U.S. for labor inside the U.S. This leads to an increase in the equilibrium quantity and price (wage) of labor in the foreign job market in the short run.

-Refer to the Above Figure