The Magnitude of the Union-Non-Union Wage Differential Depends on All

question 13

Multiple Choice

The magnitude of the union-non-union wage differential depends on all of the following, except:

• A) the elasticity of labour demand in each sector.
• B) the substitutability between two sectors of workers in the same industry.
• C) the ability of the union to raise wages in the organized sector.
• D) the elasticity of labour supply in the non-union sector.
• E) the size of the union sector relative to the non-union sector.

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Definitions:

Inflation

The increase in the average price of goods and services over time, detracting from the effective purchasing capacity.

Recession

A recession is a period of economic decline across a broad spectrum of the economy lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Government

The system or group of people governing an organized community, often a state.

Active Approach

A strategy or policy that involves direct intervention or action, often by the government or an organization, to achieve a specific goal.