Which of These Is an Advantage of Long-Term Contracts in Resource

question 36

Multiple Choice

Which of these is an advantage of long-term contracts in resource markets?

• A)Long-term contracts decrease the duration of recessionary gaps.
• B)Long-term contracts reduce unemployment below its natural rate.
• C)Long-term contracts help avoid recession in an economy.
• D)Long-term contracts increase the flexibility of nominal wages.
• E)Long-term contracts reduce the average cost of negotiation.

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Definitions:

Universal

Applies or is relevant to all members within a group or category without exception; embracing or applicable in all cases.

Rational Choice Theory

A framework for understanding economic and societal behavior, positing that individuals act based on their preferences and rational calculations to maximize benefit or utility.

Interacting Individuals

Interacting individuals refer to the process where two or more people communicate or affect each other’s behavior and thoughts.

Benefits

Various forms of support, often from the government, in the form of cash or services, intended to ensure the welfare and protection of citizens or employees.