________ keeps the market wage above the level that would clear the labor market.

Question

Quizplus · Accepted Answer

Wage rigidity refers to the resistance of wages to move to the level that would clear the labor market. This can occur due to various reasons such as minimum wage laws, labor unions, and employer preferences for stable wages. As a result, the market wage remains above the level that would equate labor supply and demand, leading to unemployment or unmet demand for labor.

________ Keeps the Market Wage Above the Level That Would