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Management · Q772

Labour and Social Welfare

Graduate and Post Graduate · Management · question 772

Q772

According to the efficiency wage model, during a recession, firms will not reduce real wages because

A.
unions would do on strike, reducing profitability
B.
this would reduce worker's effort and productivity
Answer
C.
the equilibrium real wage has increased
D.
profitability is more at the time of recession

Answer: Option B

Solution

Answer: Option B
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