A company hires 50 new workers to increase production. How will this decision impact the goods market and the factor market?

Question

Accepted Answer

The factor market will experience higher labour demand, while the goods market may see an increased supply of goods.

Answer

The goods market will shrink because wages increase, reducing consumer spending.

Answer

The factor market will be unaffected, but the goods market will see an increase in product availability.

Answer

The goods market will collapse because firms spend too much on wages.

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