What is the overall long-run impact of labor immigration on returns to factors of production?
A) Returns to labor will increase and returns to capital will decrease.
B) Returns to labor and returns to capital will both increase.
C) Both relative and absolute returns to factors of production will not change.
D) Both relative and absolute returns to factors of production will increase.

Question

Quizplus · Accepted Answer

Labor immigration does not have a significant long-run impact on the absolute or relative returns to factors of production. This is because immigration is one of many factors that affect the supply and demand for labor and capital, and these factors interact in complex ways over time. However, in the short run, immigration can have significant effects on specific industries, regions, and groups of workers.

What Is the Overall Long-Run Impact of Labor Immigration on Returns