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Labor is a resource that is necessary to produce many goods. "If the price of labor falls," says the economist, "the prices of goods will soon follow." How does this work?

Athe supply of goods rises
Bthe demand for goods falls
Cthe demand for goods rises
Dthe supply of goods falls

Verified Answer :

WorldlyGlass49

Labor is a resource that is necessary to produce many goods. "If the price of labor falls," says the economist, "the prices of goods will soon follow."
This works because A) the supply of goods rises.

If the price of labor falls, the supply of goods rises, and the prices of those goods fall.

The right answer is: a. the supply of goods rises

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