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Unformatted text preview: ve the market clearing rate because A) they believe B) that the productivity of workers increases with the wage rate. they have C) agreed not to cut wages in an explicit agreement with their workers. they have D) implicitly agreed not to cut wages because their workers care about relative wages . they want to make sure they abide by minimum wage regulation. Answer: D Diff: 2 Topic: Explaining the Existence of Unemployment Skill: Conceptual AACSB: Reflective Thinking 24) If productivity increases as wages increase and firms pay a wage above the market clearing wage, then A) these firms will business in the long run because they will not be able to compete with firms paying lower wages. go out of B) these firms will face an excess demand for labor and will be able to hire the best workers in the market. C) these firms will have lower profit levels than their competitors. D) a potential benefit these firms may receive is a reduction in employee turnover. Answer: D Diff: 2 Topic: Explaining the Existence of Unemp...
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This note was uploaded on 06/02/2013 for the course ECON 130 taught by Professor Meshew during the Fall '13 term at Victoria Wellington.
- Fall '13