Since the Internet became a common tool for business, employees at Plain Truth Advertising have maintained a semi-secret website where wages of employees are published and comparative salaries of friends at other advertising agencies are also published. Employees at Plain Truth have noticed that wage dispersion of similarly ranked employees has shrunk dramatically in the past five years. What happened?
What will be an ideal response?
Better information about prevailing wages has reduced wage dispersion. Asymmetric information about wages has been reduced and the internal labor market is becoming more competitive and more in line with the external market.
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A) grant subsidies to consumers to stimulate demand. B) impose a tax on the producers to stimulate supply. C) impose taxes on consumers to stimulate demand. D) grant subsidies to producers to reduce supply.
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a. Aggregate demand rises, and aggregate supply falls. b. Aggregate demand rises, but aggregate supply does not change. c. Aggregate demand falls, and aggregate supply rises. d. Aggregate demand and aggregate supply rise. e. Aggregate demand and aggregate supply fall.