Table 19-1 Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. Economists suspect that the increase in the earnings gap between skilled and unskilled workers is likely due to
A)an increase in the demand for skilled labor relative to the demand for unskilled labor.
B)an increase in international trade.
C)improvements in technology.
D)All of the above are correct.

Question

Table 19-1  Source: US Census Bureau and Mankiw's calculations
-Refer to Table 19-1. Economists suspect that the increase in the earnings gap between skilled and unskilled workers is likely due to
A)an increase in the demand for skilled labor relative to the demand for unskilled labor. 
B)an increase in international trade. 
C)improvements in technology. 
D)All of the above are correct.

Quizplus · Accepted Answer

The increase in the earnings gap between skilled and unskilled workers is likely due to all of the factors listed in the answer choices. The demand for skilled labor has increased relative to unskilled labor due to changes in the economy and employment opportunities. International trade has also played a role in shifting demand towards skilled workers. Finally, improvements in technology have made skilled workers more productive and in higher demand, leading to higher earnings.

Table 19-1 Source: US Census Bureau and Mankiw's Calculations