BA 372 Lesson 8 Assignment 2

BA 372 Lesson 8 Assignment 2 - Ashley B Hilliard July 5...

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Ashley B. Hilliard 258-10-0169 July 5, 2010-October 22, 2010 BA 372 Lesson#8, Assignment 2 1. If the population of the United States suddenly grew because of a large immigration, what would happen to wages? What would happen to the rents earned by the owners of land and capital? The affect on wages would depend first, more potential workers would be competing with each other and this would tend to drive down wages. But the larger population would mean more potential consumers, increasing demand for goods and services to the population. This would increase the derived demand for labor, which would tend to drive up wages. In the short run, the potential for increased output is relatively rigid. A large sudden influx of immigrants may mean larger economies of scale or more firms entering into the various markets, these take time to develop. But wages also tend to be sticky on the downside, especially in the short run. Rents would have to increase. Land and capital available for handling the increased population
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BA 372 Lesson 8 Assignment 2 - Ashley B Hilliard July 5...

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