According to the Two-Sided Search Model, in Equilibrium Labour Market

question 2

Multiple Choice

According to the two-sided search model, in equilibrium labour market tightness tends to be high when

• A)profits are close to zero.
• B)the cost of a vacancy is high relative to the firm's share of the surplus.
• C)the firm's share of the surplus is high relative to the cost of a vacancy.
• D)employment insurance benefits are high relative to the productivity of a match.
• E)the firm's share of the surplus is increasing in market tightness.

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