When a firm makes verbal promises about future working conditions, benefits and raises, and promotions, it is offering a(n)
A. implicit labor contract.
B. compensating wage differential.
C. human capital contract.
D. explicit labor contract.
Answer: A
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Taxes impact incentives to use resources since they distort relative prices
Indicate whether the statement is true or false
The downward slope of the demand curve is attributed to:
a. the inverse relationship between price and quantity demanded. b. the direct relationship between income and quantity demanded. c. the direct relationship between price and quantity demanded. d. the inverse relationship between income and quantity demanded. e. the direct relationship between consumer preferences and quantity demanded.
The third step of the four step process is to
a. identify the new equilibrium and then compare the original equilibrium price and quantity to the new equilibrium price and quantity. b. decide whether the economic change being analyzed affects demand or supply. c. draw a demand and supply model before the economic change took place. d. decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram.
Suppose investment is equal to $950 billion, purchases of newly produced capital goods is $670 billion, and changes in business inventories is -$120 billion. What does purchases of new residential housing equal?
A. $1,500 billion B. $100 billion C. $160 billion D. $400 billion