Practice mode Human Capital

Economists suggest that the widening wage gap between unskilled and skilled workers may be caused by what?

Correct answer B. A decrease in the demand for unskilled workers because of advances in technology and increases in international trade

Explanation

Skill-biased technology raises demand for educated workers, while imports from low-wage countries replace unskilled jobs. Both reduce relative demand for unskilled labour and widen the gap.

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