Suppose there is an improvement in technology then our model

Suppose there is an improvement in technology, then our model predicts A.supply of labor will increase and the real wage will fall B.equilibrium employment may fall, rise, or stay the same because of conflicting substitution and wealth effects C.the demand for labor will initially decline, but bounce back because of a change in the real wage D.the equilibrium real wage may fall, rise, or stay the same because of conflicting substitution and wealth effects

Solution

C.the demand for labor will initially decline, but bounce back because of a change in the real wage because initially with improvement in technology, labour will be sustitutes with capital and more and more capital intensive methods will be used. But gradually, with increase in real wage demand will bounce back.