If Firms Are Paying Efficiency Wages, They

question 108

Multiple Choice

If firms are paying efficiency wages, they

• A)may be reluctant to increase nominal wages when aggregate demand increases.
• B)are highly vulnerable to import competition.
• C)may be targeted for takeover by firms paying market wages.
• D)may be reluctant to cut wages when aggregate demand declines.

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Definitions:

Depressed Person

A person suffering from depression, a mental health disorder characterized by persistently depressed mood or loss of interest in activities, causing significant impairment in daily life.

Fundamental Fear

A basic, instinctual fear that is deeply embedded in humans, often related to survival such as fear of darkness or predators.

Agoraphobia

An anxiety disorder characterized by an intense fear of being in places where escape might be difficult or that help wouldn't be available if things go wrong.

Major Depression

Major depression is a mental health disorder characterized by persistently depressed mood or loss of interest in activities, causing significant impairment in daily life.