Which of the Following Is an Example of a Compensating

question 183

Multiple Choice

Which of the following is an example of a compensating differential?

• A)Paying workers with more years of experience higher wages than workers with fewer years of experience, all else equal
• B)Paying workers who work on the day shift lower wages than workers who work the night shift, all else equal
• C)Paying accountants who have passed the Certified Public Accountant exam higher wages than accountants who have not passed it, all else equal
• D)Paying workers who have a higher educational attainment level higher wages than workers with less education, all else equal

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Definitions:

Political Lag

The delay between a need for policy action being identified and the government implementing the response, often due to bureaucratic or political reasons.

Decision Lag

The time taken between identifying an economic issue and the implementation of policy to address it.

Progressive

In the context of taxation, it refers to a tax system where the tax rate increases as the taxable amount increases, often aimed at reducing income inequality.

National Debt

The total amount of money that a country's government has borrowed, through various means, and has yet to repay.