Efficiency Wages, Above Equilibrium Minimum Wage Rates, and Higher Union

question 32

Multiple Choice

Efficiency wages, above equilibrium minimum wage rates, and higher union wages are likely to

• A) increase the natural unemployment rate.
• B) increase cyclical unemployment.
• C) reduce the equilibrium real wage rate.
• D) increase the equilibrium real wage rate.
• E) decrease the natural unemployment rate.

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Definitions:

Direct Materials Purchase Budget

A financial plan that estimates the quantities and costs of direct materials to be purchased to meet production requirements.

Ending Inventories

Ending inventories refer to the final amount of goods available for sale or use at the end of an accounting period.

Direct Labor Budget

A financial plan that estimates the cost of direct labor needed to meet production needs within a specific timeframe.

Direct Labor-Hour

A measure of the amount of time workers spend directly working on manufacturing a product or providing a service.