If Nominal Wages Cannot Be Cut, Then the Only Way

question 29

Multiple Choice

If nominal wages cannot be cut, then the only way to reduce real wages is by:

• A) adjustments via inflation.
• B) unions.
• C) legislation.
• D) productivity increases.

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Definitions:

Minimum Wage

The lowest legal hourly pay that employers can compensate workers, set by government law.

Pay Grade

A step or level within an organization’s pay structure that defines the pay scale for job positions according to their responsibility, skill level, and job characteristics.

Pay Structure

The organization of different levels of pay for different jobs within a company, reflecting factors such as skill, seniority, and performance.

Pay Scale Overlaps

Refers to situations where the salary ranges for different positions within an organization overlap, allowing for potential discrepancies in pay for roles of differing responsibilities.