What causes the labor demand curve to shift? List three factors that can cause the labor demand curve to shift rightward?
What will be an ideal response?
Any change that affects the entire schedule relating the quantity of labor and the value of marginal product of labor will shift the labor demand curve.
Factors that can cause the labor demand curve to shift rightward are:
a) Increase in output prices: If the price of the output the labor is used to produce increases, the labor demand curve shifts rightward.
b) Technology and productivity: If technological progress increases labor productivity, the demand schedule for labor shifts to the right.
c) Falling input prices: If there is a fall in the price of inputs that are combined with labor to produce output, the labor demand curve shifts rightward.
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Explain why economists today tend to favor a comprehensive personal consumption tax
What will be an ideal response?
The classical dichotomy states that
A) money is superneutral. B) goods markets are separated from labor markets. C) demand is separate from supply. D) real markets determine nominal outcomes, not the reverse.