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This equation allows roe to have a diminishing effect on log(salary). is this generality necessary? explain why or why not.

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User Tonie
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1 Answer

2 votes

According to the equation attached. This generality is not necessary given that the salary is given by the supply and demand of work. The labor demand curve is decreasing, which means that as the real salary decreases, the demanded amount of work will increase.

This equation allows roe to have a diminishing effect on log(salary). is this generality-example-1
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User Yiselis
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8.2k points
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