Describe the effect education and training have on outcomes in the labor market
What will be an ideal response?
Education and training affect both the supply and demand sides of the labor market. On the supply side, because education and training takes time and money to acquire, the number of people available for high-skilled work is less than those available for low-skilled work. As a result, the supply curve of high-skilled labor is left of the supply curve of low-skilled labor.
On the demand side, education and training increases the productivity of workers, giving them a higher value of marginal product. The higher value of marginal product means that the demand curve for high-skilled labor lies right of the demand curve for low-skilled labor.
With a decrease in supply and an increase in demand, the wage rate for high-skilled workers is higher than the wage rate for low-skilled workers. The effect on the quantity of labor employed, however, is indeterminate..
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Consider the following data for a nation.YearNominal GDPPrice Index1$3590240100345110448120556140The country's real GDP declined between years
A. 1 and 2. B. 2 and 3. C. 3 and 4. D. 4 and 5.
According to the interest rate effect, as the price level rises,:
A. people feel poorer and buy less. B. United States products become more expensive and foreigners buy less U.S. goods. C. interest rates fall, and people buy less. D. interest rates rise, and people buy less.
A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana. We can conclude that:
A. beer and marijuana are substitute goods. B. beer and marijuana are complementary goods. C. beer is an inferior good. D. marijuana is an inferior good.
If the reserve ratio is designated by "r," the amount of deposits a bank can hold as excess reserves is equal to 1 / (1 - r).
Answer the following statement true (T) or false (F)