Wages for high-skilled labor have risen more than wages for low-skilled labor even though more people are highly skilled college graduates than ever before. Which of the following explains this?
a. The demand for high-skilled labor has risen alongside the number of college graduates.
b. The demand for low-skilled labor has risen while the demand for high-skilled labor remains the same.
c. The value of both high-skilled labor and low-skilled labor has risen, but demand for both remains the same.
d. The value of low-skilled labor has risen alongside the number of high school graduates.
a. The demand for high-skilled labor has risen alongside the number of college graduates.
Economists use the demand and supply model to reason through the most likely causes of this shift. The increase in the price of high-skilled labor must be explained by a greater demand, because without higher demand, the price of high-skilled labor would go down as more people become highly skilled.
You might also like to view...
Indexation refers to
a. a process of adjusting the nominal interest rate so that it is equal to the real interest rate. b. using a law or contract to automatically correct a dollar amount for the effects of inflation. c. using a price index to deflate dollar values. d. an adjustment made by the Bureau of Labor Statistics to the CPI so that the index is in line with the GDP deflator.
The basic idea behind the convergence theory is:
A. also the basic idea behind the catch-up effect. B. each additional unit of capital provides larger gains when you're coming from behind. C. that countries starting at low levels of income will tend to grow at much faster rates than those starting with high levels of income. D. All of these are true.