Explain how equilibrium wages and employment change in the economy when there is an increase in the number of working-age immigrants. Be clear on the short-run and long-run response. b) Suppose that some of the immigrants set up businesses rather than become employees. Explain how you expect this to affect the wage-setting curve, the price-setting curve and the labour market equilibrium. c) Answerbriey, do the results you have obtained in (a) and (b) suggest that immigration is good for the economy?
Explain how equilibrium wages and employment change in the economy when there is an increase in the number of working-age immigrants. Be clear on the short-run and long-run response. b) Suppose that some of the immigrants set up businesses rather than become employees. Explain how you expect this to affect the wage-setting curve, the price-setting curve and the labour market equilibrium. c) Answerbriey, do the results you have obtained in (a) and (b) suggest that immigration is good for the economy?
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 13P
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Explain how equilibrium wages and employment change in the economy when there is an increase in the
number of working-age immigrants. Be clear on the short-run and long-run response.
b) Suppose that some of the immigrants set up businesses rather than become employees. Explain how
you expect this to affect the wage-setting curve, the
c) Answerbriey, do the results you have obtained in (a) and (b) suggest that immigration is good for the
economy?
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