Because of labor hoarding,an increase in output may signal
A)an increase in employment.
B)a reduction in employment.
C)no change in employment.
D)a reduction in productivity.

Question

Quizplus · Accepted Answer

Labor hoarding refers to the practice of keeping excess employees even during periods of low demand. In this case, an increase in output may not necessarily lead to an increase in employment as the firm may have already been employing more workers than required. Therefore, there may not be any change in employment even with an increase in output.

Because of Labor Hoarding,an Increase in Output May Signal