According to the Efficiency Wage Model,during a Recession,firms Will Not

question 10

Multiple Choice

According to the efficiency wage model,during a recession,firms will not reduce real wages because

• A)unions would go on strike, reducing profitability.
• B)this would reduce worker effort and productivity.
• C)the equilibrium real wage has increased.
• D)legally, they can't.

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Definitions:

Investments

Assets or items purchased with the expectation that they will generate income or appreciate in value over time.

Withdraw

The act of taking money out of a business by an owner for personal use or removing oneself from a business arrangement or partnership.

Revenue

Sum total of revenues earned from transactions involving goods or services that are fundamental to a company's main line of business.

Temporary Account

An account used to track transactions within a fiscal period, which is closed and zeroed out at the period's end, moving its balances to permanent accounts.