An Important Unanswered Question About the Role of Unions in Developed

question 115

Multiple Choice

An important unanswered question about the role of unions in developed economies is whether the presence of unions affects long-run productivity.There is some evidence to suggest that the presence of a union

• A)increases the human capital of unionized workers,which leads to increased long-run productivity for the firm.
• B)reduces the demand for labour and therefore the demand for physical capital.
• C)decreases the human capital of unionized workers,and therefore reduces long-run productivity.
• D)reduces the level of employment (because of the union-wage premium)and thus raises the marginal product of labour.
• E)reduces the expected profitability of installed capital and therefore leads to reduced capital investment by firms.

---

Definitions:

Democratic

Pertaining to a system of government by the whole population or all the eligible members of a state, typically through elected representatives.

Laissez-faire

An economic principle advocating minimal governmental interference in the free market and the economic affairs of individuals.

Bureaucratic Innovations

New methods, policies, or practices implemented within bureaucratic structures to improve efficiency, responsiveness, or outcomes in organizational or governmental operations.

Ethnicity

A category of people identified by common characteristics such as culture, language, or ancestral heritage.