In the Basic Competitive Model of Labor Markets We Assume

question 16

Multiple Choice

In the basic competitive model of labor markets we assume that:

• A)firms have discretion over the wages they pay to their employees.
• B)market wage rates are not costlessly observable.
• C)all compensation is monetary and there are some fringe benefits included.
• D)all compensation is monetary and there are no fringe benefits.

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Definitions:

Equity

The value of an ownership interest in property, including shareholders' equity in a corporation.

Debt

An amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, usually with interest.

Financial Risk

The possibility of losing money on an investment or business venture.

ROE

Return on Equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.