What is the effect of immigration in the long run?
A)Output will increase.
B)Factor prices will increase.
C)There will be no change in factor prices.
D)There will be an increase in output but no change in factor prices.

Question

Quizplus · Accepted Answer

Immigration can lead to an increase in output as it can bring in more labor and skills. However, it may not necessarily lead to a change in factor prices such as wages. In the long run, factor prices are determined by the overall supply and demand in the economy, which is influenced by many factors beyond immigration. Therefore, the best choice is D as it captures the potential positive effect of immigration on output while acknowledging that it may not always lead to changes in factor prices.

What Is the Effect of Immigration in the Long Run