In the Lewis model, what does the term "surplus labour" refer to?
a. An amount of labour that is so high that it deflates wages throughout the economy
b. Labour that can be withdrawn from the low productivity agricultural sector without a decrease in the

Answers

Answer: B. Labour that can be withdrawn from the low productivity agricultural sector without a decrease in the total production. In the Lewis model, surplus labour refers to a large supply of workers that are employed in the low-productivity agricultural sector and can be shifted to the higher-productivity industrial sector without impacting overall production levels. This influx of new labour into the industrial sector increases the industrial profits, wages, and contributes to economic growth.

Answered by yuethan

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