Final answer:
Employers often select new workers from the external labor market, and the decision to hire can be influenced by government regulations, social institutions, and unions that shape the demand side of the labor market. The correct option is: a) External.
Step-by-step explanation:
Employers choose new workers from the external labor market through recruiting and selection. When businesses are deciding to hire, various factors on the demand side of the labor market can influence their decisions, such as government regulations, social institutions, and the role of unions. Government rules can determine how easy or hard it is to start or expand a business, which, in turn, affects the hiring process. For example, excessive bureaucracy and the need for many permits can discourage business expansion and hiring. Zoning laws might restrict where businesses can operate and their hours of operation. Moreover, regulations that impact the types and quality of products a company can sell will also shape the labor market dynamics.