Multiple Choice
If all employers pay an efficiency wage, then, comparing average wages and unemployment rates across areas, and if workers in areas with low unemployment rate can easily find alternative jobs, one would expect
A) average wages to be directly (positively) related to unemployment rates.
B) average wages times one minus the unemployment rate to be the same across areas.
C) the duration of unemployment, but not necessarily the rate, to be inversely related to the average wage.
D) average wages will be higher in areas with low unemployment rates.
Correct Answer:
Verified
Correct Answer:
Verified
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