What Is the Role of Short-Run Adjustments in Determining the Wage

question 2

Multiple Choice

What is the role of short-run adjustments in determining the wage structure?

• A) They support the neoclassical theory of labour market equilibrium.
• B) They can explain the existence of wage differentials across regions, industries, or occupations even if the labour market is very competitive.
• C) They are the primary factor generating the public sector/private sector wage differential.
• D) They are necessary in order to efficiency wage differentials to exist.
• E) They are closely linked to the firm size effect on wages.

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