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

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