Which of the Following Best Explains Why Current Employers Do

question 30

Multiple Choice

Which of the following best explains why current employers do not seem to reduce wages for existing employees in the short term when the supply for a particular set of skills far outstrips the demand?

• A) because of the wage compression phenomenon
• B) because of the negative impact on morale
• C) because labour budgets tend to be determined on an annual basis
• D) because fewer potential employees tend to put upwards pressure on wages

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Definitions:

Great Depression

A severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States.

Economic Policy

Economic policy refers to the actions that governments take in the economic field covering taxation, government budgets, money supply, interest rates, and labor market regulations.

Monetary Policy

Actions by a central bank to control the money supply and interest rates in an economy.

Trade Restrictions

Measures imposed by governments to control the amount of goods and services that can be traded across borders.