Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increased wage elasticity leads to lower demand for labor across all sectors.
B
Sectoral shifts increase labor demand in declining industries while demographic changes have no effect.
C
A rise in wage elasticity may result in higher labor demand in sectors experiencing demographic growth.
D
Demographic changes reduce labor demand regardless of sectoral shifts and wage elasticity.
Understanding the Answer
Let's break down why this is correct
Answer
Wage elasticity refers to how sensitive the demand for workers is to changes in wages. If wages increase and employers are very responsive, they might hire fewer workers, leading to lower labor demand. Sectoral shifts happen when certain industries grow while others shrink, which can change where jobs are available. For example, if technology companies are booming, more workers will be needed in that sector, even if other sectors like manufacturing are losing jobs. Demographic changes, such as an aging population or more women entering the workforce, can also affect labor demand by changing the types of skills and jobs that are in demand, influencing how industries adapt to meet these new needs.
Detailed Explanation
When wage elasticity rises, it means that businesses are more responsive to changes in wages. Other options are incorrect because This option suggests that higher wage elasticity always means less demand for workers; This answer implies that sectoral shifts only help declining industries.
Key Concepts
wage elasticity
sectoral shifts
and demographic changes.
Topic
Labor Demand Dynamics
Difficulty
hard level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.