The efficiency-wage theory predicts that
A) profit-maximizing firms will maintain the wage level at a rate too low to achieve full employment in the labor market.
B) wage rigidities will be eliminated even in the short-run.
C) will maintain the wage level at a rate too high to achieve full employment in the labor market.
D) the labor market clears at a wage rate above equilibrium.
Correct Answer:
Verified
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