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7). B: i. Figure: Labor Market (Parkin, 2012, p. 22) ii. Figure 2: Effect of greater immigration on Real GDP (Parkin, 2012, p. 23) iii. Due to relaxation of immigration laws large number of immigrants enters into the country and started to work as workers in various industries of the country. This increase in the number of immigrants increases the supply of labor in various industries. This increment in the number of labor supplied increases shifts the equilibrium point in the market for labor. At the existing equilibrium real wage rate (R1), there occurs excess supply for labour which causes the real wage rate to fall in the next period. The new equilibrium is achieved with the increased level of labor employment and lower level of real wage rate in the labor market. At the new equilibrium the amount of labor employed increases from L1­ from L2­ and the real wage rate falls from R1 to R2. These facts are evident from Figure 1. Again this increment in the employment of labor, given the production technologies and equipments, increases the total amounts of output produced in each industries and hence, given the number of total population in the country the real GDP of the country rises up. With the help of relaxation of the immigration laws the absolute number of workers available to the sector of production of goods and services in the country rises up. …

These technological advancements help producers of various goods and services to use available production techniques more efficiently and the productivity of each worker increases. Hence, the production function shifts up with the result that after the introduction of better and advanced techniques of production each worker produces higher level of output with the given levels of factors of production. With the same amount of labor employed (L) the output level rises up. These facts are clear from Figure 3 (Parkin, 2012, pp. 24-25). Figure 3: Technological change and shifts in Production Function (Parkin, 2012, pp. 35-36) ii. If the total amount of labor force employed in the process of production of goods and service remain constant in the economy, then in the face of technological advancement the efficiency of production of each of the worker will increase. This is because each worker is now given a better technology to work with which will raise the amount of goods and services produced by each worker per hour. Hence, in the production sector of the economy greater amounts of goods and services will be produced at each point of time, in comparison to the previous period with no technological advancement. Hence, the volume of real GDP will rise up in the economy. Also given the total number of population in the economy, the volume of real GDP per person will rise up too (Parkin, 2012, pp. 35-36). iii. After the introduction of new technology in the process of production of various goods and services the real GDP and the real GDP per person rises up. Also the productivity of each worker or laborer rises up.

 
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