Nancy and Sheila Are Both Loan Officers Who Started Working

Nancy and Sheila are both loan officers who started working for their current employer during the same year, graduated from the same university with bachelors' degrees in economics, and achieved similar performance reviews. Nancy earned a master's degree last year. If Nancy earns a higher annual salary than Sheila because she has more formal education, the employer is

A) basing pay on experience.
B) paying efficiency wages.
C) practicing discrimination.
D) rewarding increases in human capital.

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