Which of the Following Is Not a Source of Downward

question 36

Multiple Choice

Which of the following is not a source of downward wage rigidity?

• A)Unions appear to prefer layoffs to wage reductions,as the former affects only workers without seniority,while the latter would affect all workers
• B)Firms appear to prefer layoffs to wage reductions,as the former allows the firm to "hoard" workers in whom they have invested specific training
• C)Implicit contracts between employers and their workers
• D)Layoffs are discouraged due to the method used to finance unemployment compensation insurance

---

Definitions:

Legal Fees

Charges for the professional services provided by lawyers or attorneys.

Abnormal Returns

Returns on a stock or portfolio that exceed the benchmark or expected return based on the risk assessment.

Rights Offering

A method by which a company offers new shares to its existing shareholders in proportion to their existing holdings, typically at a discount to the market price.

Subscription Price

The cost at which investors can purchase shares during a company's initial public offering (IPO) or when subscribing to a new issue of shares.