Because of labor hoarding,a reduction in output may signal
A)an increase in employment.
B)a reduction in employment.
C)no change in employment.
D)a reduction in productivity.

Question

Quizplus · Accepted Answer

Labor hoarding occurs when companies retain more employees than needed, expecting future increases in demand. Thus, even if output decreases, employment levels may not change immediately as firms hold onto their workforce.

Because of Labor Hoarding,a Reduction in Output May Signal