When the economy enters into a recession, your employer is ________ to reduce your wages because ________.
A)unlikely; output and input prices generally fall during recession
B)unlikely; lower wages reduce productivity and morale
C)likely; output prices always fall during recession
D)likely; aggregate demand is vertical in the long run
E)likely; labour demand increases during recessions

Question

Quizplus · Accepted Answer

Lowering wages during a recession can negatively impact productivity and morale, leading to decreased employee motivation and work quality. Therefore, it is unlikely that an employer would choose to reduce wages during a recession.

When the Economy Enters into a Recession, Your Employer Is