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Chapter 9: Labor demand (page 327)

How does a change in technology affect the demand for labor?

Short Answer

Expert verified

it has effects that could increase or decrease the demand for labor.

Step by step solution

01

Labor demand 

Changes in technology can cause the demand for labor to both increase as well as decrease depending on the situation. If technological changes make labor more productive relative to the factors of production utilized such as capital, then firms would demand an increased amount of workers and substitute the other factors of production with new labor.

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