Some argue that according to implicit contract theory,unemployment is really voluntary since
A) workers enter freely into these agreements, recognizing that they are accepting the risk of unemployment.
B) firms agree not to lay off anyone if the economy should turn down.
C) under such contracts wages are tied to a firm's profits, minimizing involuntary unemployment.
D) the importance of seniority in hiring practices is minimized.
E) under such contracts wage rates are tied directly to the market demand and supply conditions.

Question

Quizplus · Accepted Answer

Implicit contract theory argues that there is an unwritten agreement between employers and employees. Workers who voluntarily enter into these agreements understand the risks of unemployment, and therefore, it could be argued that unemployment is voluntary. This theory suggests that workers who choose to accept a job are implicitly agreeing to the terms and conditions of the job, which include the risk of being laid off. Therefore, unemployment can be seen as a voluntary choice, rather than an involuntary one.

Some Argue That According to Implicit Contract Theory,unemployment Is Really