Which of the Following Would Explain Wage Rigidities

question 81

Multiple Choice

Which of the following would explain wage rigidities?

• A)Inflexible long-term contracts
• B)Inflation
• C)The liquidity of financial assets
• D)The reluctance of firms to lay off workers
• E)High worker productivity

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Definitions:

Labor Productivity

A gauge of economic productivity that contrasts the total output of goods and services with the labor hours invested in creating those outputs.

Human Capital

The collective skills, knowledge, and experience of an individual or workforce, considered an asset in terms of their value to an organization or economy.

Industrial Policy

The view that government—using taxes, subsidies, and regulations—should nurture the industries and technologies of the future, thereby giving these domestic industries an advantage over foreign competition.

Corporate Houses

Large companies or business organizations that operate in multiple areas or sectors.