The Efficiency-Wage Theory Predicts That

question 86

Multiple Choice

The efficiency-wage theory predicts that

• A) profit-maximizing firms will maintain the wage level at a rate too low to achieve full employment in the labor market.
• B) wage rigidities will be eliminated even in the short-run.
• C) firms will maintain the wage level at a rate too high to achieve full employment in the labor market.
• D) the labor market clears at a wage rate above equilibrium.

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Percentage

Rate or proportion of each hundred.

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A dot used to separate the whole number part from the fractional part of a number.

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