Author Question: The discovery of a new oil field has attracted several new investors to Oiland. How will this affect ... (Read 77 times)

bobbysung

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The discovery of a new oil field has attracted several new investors to Oiland. How will this affect Oiland's labor demand curve?
 
  What will be an ideal response?

Question 2

The biggest problem caused by a deflation is that
 
  A) prices fall. B) wages fall.
  C) interest rates rise. D) people cannot repay their debts.


Laurenleakan

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Answer to Question 1

An increase in investment in Oiland will lead to an increase in production in Oiland. This will lead to an increase in the demand for labor. As a result, the labor demand curve of Oiland will shift to the right leading to an increase in the equilibrium wage rate and a decrease in unemployment.

Answer to Question 2

D



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