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Business, 19.03.2020 08:57 alystidham1439

Maria Tivlinsky and Harry Davis, both interns at an economics research institute in the country Southville, are discussing the effects of the increase in the supply of unskilled labor in the economy. Maria says that the average nominal wage paid to unskilled labor is likely to fall. This, according to her, would cause firms to hire more workers and will reduce unemployment in the country. Harry , however, does not think that unemployment will necessarily fall; too many workers looking for jobs could depress wages and employment prospects on the whole.
Which of the following, if true, is likely to weaken Harry's claim that unemployment will not fall?

A. Labor union membership in Southville stands at around 40 percent of the unskilled labor force.
B. The market for skilled workers in Southville is highly competitive.
C. Unskilled workers form a large proportion of the labor force.
D. The economy is expanding rapidly as a result of which the demand for labor is expected to increase sharply.
E. The recently revamped tax code in Southville has lowered income taxes for the lower-income workers.

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