Which of the following is a solution to the problem of moral hazard in the labor market?
A) Provision of real wages
B) Provision of nominal wages
C) Provision of efficiency wages
D) Provision of minimum wages
C
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A decrease in growth rates will cause:
Identify each of the following as (i) part of an expansionary fiscal policy, (ii) part of a contractionary fiscal policy, or (iii) not part of fiscal policy
a. The personal income tax rate is lowered. b. Congress cuts spending on defense. c. College students are allowed to deduct tuition costs from their federal income taxes. d. The corporate income tax rate is lowered. e. The state of Nevada builds a new tollway in an attempt to expand employment and ease traffic in Las Vegas.
The rationality assumption says that
A. all economic analysis must be normative. B. people never make decisions that would leave them worse off. C. people do not intentionally make decisions that would leave them worse off. D. people do not respond to incentives since incentives require scarce resources.
An economy with a trade surplus must also have:
A. positive net capital inflows. B. a budget surplus. C. a trade deficit. D. positive net capital outflows.