An expanding economy requires more workers. If the supply of workers becomes inadequate to meet the demand, what is the likely impact on the economy?

A) an economic slowdown is likely
B) employment trends will reverse and unemployment will occur
C) government deficits will result from capacity utilization
D) inflation may result from upward wage pressures

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Nandiinii Rawatt · Accepted Answer

Final Answer : D, Explanation :  When the supply of workers becomes inadequate to meet demand, competition among employers for a limited number of workers may lead to upward wage pressures. As companies raise wages to attract workers, the cost of production increases, which can result in higher prices for goods and services. This can lead to inflationary pressures which can have negative effects on the economy.

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