One Reason the Lowest Wage Rate Is Not Necessarily the Same

question 166

Multiple Choice

One reason the lowest wage rate is not necessarily the same as the efficiency wage is that workers might

• A) be more productive at a higher wage rate.
• B) have more incentive to shirk at higher wage rates.
• C) be tempted to switch jobs more frequently at higher wage rates.
• D) be less inclined to work well at a higher wage rate.

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Definitions:

Futures Contract

A contract to purchase or sell a specified commodity or financial instrument at an agreed-upon price at a future date.

Credit Risk

The risk that the bond will not make all of its promised payments; default risk.

Swap Market

A market in which individuals, businesses, and institutions exchange financial instruments, like interest rates or currencies.

Fixed Rate

An interest rate that remains constant over the life of a loan or investment.