What Negative Impacts Can Unions Have on Industries and the Economy

question 153

Multiple Choice

What negative impacts can unions have on industries and the economy?
I. They can initiate worker strikes and sit-ins which stall production.
II. By limiting the supply of labor in one industry they can cause an increased supply of labor in other industries, which causes lower wages in those industries.
III. They can limit firms to hiring only unionized workers, which could stop firms from hiring the labor with the most appropriate skills.

• A) I Only
• B) I and III only
• C) II and III only
• D) I, II and III

---

Definitions:

Effectiveness Lag

The delay between the time a policy or action is implemented and when its effects are observed and felt in the economy or targeted area.

Recognition Lag

The delay between the time when an economic problem or trend is identified and the time when it is officially recognized.

Discretionary Policy

Economic policies based on the judgment of policymakers rather than set by predefined rules.

Corrective Policy

Corrective Policy refers to government actions taken to fix imperfections in the market, aiming to improve economic efficiency and promote fairness.