Sam and Bob Have the Same Educational Background

question 118

Multiple Choice

Sam and Bob have the same educational background.Both have been policemen in Memphis for 10 years.Sam works from 11 P.M.until 7 A.M. ,and Bob works from 7 A.M.until 3 P.M.Sam's salary is $800 per month higher than Bob's salary.This example illustrates a wage disparity due to:

• A)efficiency wages.
• B)market power.
• C)compensating differentials.
• D)discrimination.

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Definitions:

Monetary Policy

The setting of the money supply by policymakers in the central bank.

Fiscal Policy

The setting of the level of government spending and taxation by government policymakers

Stabilize The Economy

Government or central bank policies aimed at maintaining economic growth, curbing inflation, and reducing unemployment to prevent economic recessions or depressions.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months.