A Difference in Wage Rates That Results from a Difference

question 25

Multiple Choice

A difference in wage rates that results from a difference in working conditions

• A)is known as a compensating wage differential
• B)is known as an equalizing differential
• C)reflects a difference in marginal productivity
• D)reflects job-market discrimination
• E)will be eliminated if all labor markets are perfectly competitive

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Definitions:

Treasury Bills

Treasury bills are short-term government securities with maturities ranging from a few days to 52 weeks, issued at a discount to face value.

Maturity Risk

The danger that an investment’s value will change due to a change in the absolute level of interest rates, typically affecting fixed-income securities as they approach maturity.

Marketable Securities Portfolio

A collection of liquid securities that a company holds, which can easily be converted into cash.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations.