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The Economy of High Wages suggests that: None of the other answers is correct Increased wages...

The Economy of High Wages suggests that:

None of the other answers is correct

Increased wages may decrease the productivity of labor

The demand for labor may be more inelastic than otherwise expected

All of the other answers are correct

Increased wages may cause the demand for labor to decrease

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Answer #1

Since when wages are increased, the cost of hiring labor become expensive, so the demand for labor decrease and employer like to hire more productive and skilled workers only and therefore demand for unskilled and unproductive workers decreases. This leads to decrease in the total employment in the economy.

Hence it can be said that the Economy of High Wages suggests that Increased wages may cause the demand for labor to decrease.

Hence option fifth is the correct answer.

Fifth; Increased wages may cause the demand for labor to decrease

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