A looseningloosening of the labor market will cause A. the aggregate supply curve to shift down....

A looseningloosening of the labor market will cause

A. the aggregate supply curve to shift down.

B. the aggregate supply curve to shift up.the aggregate supply curve to shift up.

C.the aggregate demand curve to shift left.the aggregate demand curve to shift left.

D.the aggregate demand curve to shift right.

When the labor market is? tight,

A. wages? fall, and the aggregate supply curve shifts down.

B.wages? rise, and the aggregate supply curve shifts down.

C.wages? rise, and the aggregate supply curve shifts up.

D.wages? fall, and the aggregate supply curve shifts up.

Expert Solution

1. Loosening of the labour market will cause

c) The aggregate demand curve to shift left

Since there are large supply of labours in the job maeket in loose labour market, employers have the perk to hire the most skilled persons with rigorous competitions among lot of candidates. As there are limited job openings compared to the numbers of job seekers, the aggregate demand curve shifts towards left.

2.Ans:-When the labour market is tight,

b) Wages rise, and the aggregate supply curve shifts down.

As in a tight labout market, employer finds it difficult to hire people for jobs as the economy is close to full employment which makes the pool of extra labour small. Supply of labour is low compared to the demand which results in raising the wages for the posts offered to job seekers causing the shift of aggregate supply curve move downward.

Rahul Sunny answered 2 years ago

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