Which of the following can decrease simultaneously the equilibrium quantity of workers hired and the equilibrium wage rate?
A) an increase in the productivity of workers
B) an increase in the rate of immigration
C) a decrease in the price level of goods
D) a decrease in the number of workers of retiring age

Question

Quizplus · Accepted Answer

A decrease in the price level of goods can lead to a decrease in the demand for labor, as firms may generate less revenue from selling their goods and thus seek to reduce costs by hiring fewer workers and possibly at lower wages. This can simultaneously decrease the equilibrium quantity of workers hired and the equilibrium wage rate.

Which of the Following Can Decrease Simultaneously the Equilibrium Quantity