If the Workers' Compensation Premium Accurately Reflected the Social Costs

question 73

Multiple Choice

If the workers' compensation premium accurately reflected the social costs of workplace injuries,then

• A)many firms would be forced out of business.
• B)the premium would function like a tax on injuries.
• C)injury rates would rise.
• D)firms would become less capital intensive.

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Definitions:

Aggregate Supply

The total supply of goods and services that firms in an economy plan to sell during a specific time period at various price levels.

Keynesian Range

A segment of the Keynesian theory where demand-pull inflation is unlikely to occur due to high levels of unemployment and underused resources.

Intermediate Range

The range within which all intermediate goods, price levels, and outputs are determined by a mix of supply and demand.

Classical Range

In economics, the range in which output and employment grow at their natural rate, and prices are stable.