The Percentage of Workers Whose Wages Are Set by Explicit

question 9

Multiple Choice

The percentage of workers whose wages are set by explicit contracts falls. This should

• A) make it more difficult for the labor market to reach an equilibrium after a change in the demand for labor.
• B) make it easier for the labor market to reach an equilibrium after a change in the demand for labor.
• C) have no impact on the movement of the labor market toward equilibrium after a change in the demand for labor.
• D) cause the labor market to always be at an equilibrium, even if there is a change in the demand for labor.

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Definitions:

Principle of Comity

A legal doctrine that suggests courts within one jurisdiction will give effect to the laws and judicial decisions of another jurisdiction, based on mutual respect rather than obligation.

Agency Relationships

A legal relationship in which one party (the agent) acts on behalf of another party (the principal) in a business transaction.

Act of State Doctrine

A principle in international law that a nation is sovereign within its own borders and its domestic actions may not be questioned in the courts of another nation.

Arbitration Clause

A provision in a contract that requires disputes between the parties to be resolved through arbitration rather than through litigation in court.