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Questions and Answers
What is the primary reason why wages are slow to respond to shifts in the economy?
What is the primary reason why wages are slow to respond to shifts in the economy?
- Labor union bargaining
- Government minimum-wage legislation
- Sticky wages due to various factors (correct)
- Efficiency wages
What is the term for wages deliberately set above the market rate to increase productivity?
What is the term for wages deliberately set above the market rate to increase productivity?
- Efficiency wages (correct)
- Equilibrium wages
- Sticky wages
- Market-clearing wages
During an economic slowdown, what happens to the labor demand curve?
During an economic slowdown, what happens to the labor demand curve?
- It becomes vertical
- It shifts to the left (correct)
- It remains unchanged
- It shifts to the right
Why does unemployment tend to be a lagging indicator?
Why does unemployment tend to be a lagging indicator?
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What is the primary purpose of unemployment insurance?
What is the primary purpose of unemployment insurance?
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How do labor unions influence the labor market?
How do labor unions influence the labor market?
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What is the effect of taxes on wage income on unemployment?
What is the effect of taxes on wage income on unemployment?
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Why do firms might voluntarily choose to pay higher wages than necessary?
Why do firms might voluntarily choose to pay higher wages than necessary?
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What is the term for the pattern of short-term ups and downs in the economy?
What is the term for the pattern of short-term ups and downs in the economy?
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What happens to the market wage during a recession?
What happens to the market wage during a recession?
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