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What Is the Role of Short-Run Adjustments in Determining the Wage

Question 5

Multiple Choice

What is the role of short-run adjustments in determining the wage structure?


A) They support the neoclassical theory of labour market equilibrium.
B) They can explain the existence of wage differentials across regions, industries, or occupations even if the labour market is very competitive.
C) They are the primary factor generating the public sector/private sector wage differential.
D) They are necessary in order to efficiency wage differentials to exist.
E) They are closely linked to the firm size effect on wages.

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