Multiple Choice
Workers and firms prefer to enter into long-term contracts because
A) workers assume the rate of inflation is going to increase whereas employers believe it is likely to fall.
B) wage negotiations are costly to each side in terms of both time and money.
C) such contracts allow enough time for all labor markets to clear.
D) seniority is more easily acquired by both employers and employees under such agreements.
E) wages, profits, and employment are less affected by changes in aggregate demand under these conditions.
Correct Answer:
Verified
Correct Answer:
Verified
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