According to Efficiency-Wage Theory

question 32

Multiple Choice

According to efficiency-wage theory
I: cutting the employer payroll tax paid for hiring skilled workers leads to a smaller unemployment rate,and
II: cutting the employer payroll tax for hiring unskilled workers leads to a smaller unemployment rate.

• A) I is true; II is not.
• B) II is true; I is not.
• C) Both I and II are true.
• D) Neither I nor II is true.

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