Workers and Firms Prefer to Enter into Long-Term Contracts Because

question 50

Multiple Choice

Workers and firms prefer to enter into long-term contracts because

• A) workers assume the rate of inflation is going to increase whereas employers believe it is likely to fall.
• B) wage negotiations are costly to each side in terms of both time and money.
• C) such contracts allow enough time for all labor markets to clear.
• D) seniority is more easily acquired by both employers and employees under such agreements.
• E) wages, profits, and employment are less affected by changes in aggregate demand under these conditions.

---

Definitions:

Prototypical Learning

A cognitive process of learning by understanding and categorizing items or concepts based on the best or most typical example of a particular category.

Mindless Learning

A form of learning in which individuals acquire information or skills without active engagement or deep understanding.

Algorithmic Learning

A method of machine learning where algorithms are used to parse data, learn from it, and make determinations or predictions.

Benjamin Whorf

An American linguist and fire prevention engineer known for his ideas about linguistic relativity, or the influence of language on thought.