What is the most likely result of efficiency wages?
A) reduced labour-force participation rates
B) reduced natural rate of unemployment
C) reduced incentive to shirk responsibilities
D) increased worker turnover

Question

Quizplus · Accepted Answer

Efficiency wages are higher than the market-clearing wage, given by employers to motivate workers to work harder and be more productive. This reduces the incentive for employees to shirk their responsibilities because they risk losing a job that pays above the market rate.

What Is the Most Likely Result of Efficiency Wages