📚 Learning Guide
Understanding Labor Demand Shifts
medium

How does a rise in macroeconomic activity influence the demand for labor in sectors with complementary labor inputs?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

It decreases demand for labor in all sectors.

B

It increases demand for labor in complementary sectors.

C

It has no effect on labor demand.

D

It only affects demand in non-complementary sectors.

Understanding the Answer

Let's break down why this is correct

Answer

When macroeconomic activity increases, it usually means that businesses are producing more goods and services to meet higher consumer demand. This rise leads companies to hire more workers to keep up with the increased production. In sectors with complementary labor inputs, such as manufacturing and logistics, more workers in one area can create a need for more workers in another. For example, if a car factory is producing more cars, it will also need more workers in the supply chain, like those transporting parts and assembling vehicles. As a result, the overall demand for labor increases in interconnected sectors, creating more job opportunities.

Detailed Explanation

When the economy grows, businesses need more workers. Other options are incorrect because Some might think that all sectors lose workers when the economy grows; It's a common mistake to think that growth has no impact on jobs.

Key Concepts

complementarity in labor
macroeconomic influences.
Topic

Understanding Labor Demand Shifts

Difficulty

medium 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.