Efficiency Wages Tend To

question 34

Multiple Choice

Efficiency wages tend to:

• A) increase costs in the short run but reduce them in the long run.
• B) raise costs in both the long run and the short run.
• C) reduce costs in both the long run and the short run.
• D) reduce costs in the short run but increase them in the long run.

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Definitions:

Labor Force

The total number of people who are willing and eligible to work, including both the employed and those seeking employment.

GDP

The Gross Domestic Product, or GDP, is a metric that captures the entire value of goods and services generated within a country over a set period, serving as a gauge of its economic performance.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all goods and services produced by an economy in a specific period, using constant prices.

Inflation

A comprehensive increase in the cost of goods and services and a depreciation in money's worth.