Labor adjustment costs are higher if:
A) workers face higher uncertainty about the permanence of changes in different industries.
B) workers are more certain about the direction of the overall economy.
C) producers have more accurate information about the availability of workers.
D) producers can easily replace workers with machines and computers.

Question

Quizplus · Accepted Answer

Labor adjustment costs are higher if workers face higher uncertainty about the permanence of changes in different industries. This means that if workers are unsure about their future employment prospects, they may be less willing to invest in training or relocation, and may require more costly policies such as unemployment insurance or job retraining programs to help them transition to new industries. This increases the overall adjustment costs of the labor market.

Labor Adjustment Costs Are Higher If