Union Leaders Who Want to Avoid Layoffs for Their Members

question 124

Multiple Choice

Union leaders who want to avoid layoffs for their members sometimes negotiate lower wages during recessions. If the wages for unionized workers at bakeries fall, the price of bread falls because

• A) bread is an essential food.
• B) lower input prices decrease demand.
• C) this is a cost-saving technology.
• D) lower input prices increase supply.
• E) the lower wage was voluntary.

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Definitions:

Government Intervention

Actions taken by government to influence or regulate economic activity, often to correct market failures and promote welfare.

Negative Income Tax

A system of income support that provides individuals with an income guarantee. If an individual's earnings fall below a certain level, they receive supplemental pay from the government rather than paying taxes.

Earned Income Tax Credit

A refundable tax credit for low to moderate income working individuals and families, aimed at reducing poverty and encouraging work.

Unemployment

A situation where individuals who are capable of working and willing to work are not able to find employment.