The Efficiency-Wage Theory Predicts That

question 124

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)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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