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Which of the Following Defines an Efficiency Wage

Question 35

Multiple Choice

Which of the following defines an efficiency wage?


A) It is the equilibrium wage rate in the labor market where the demand for labor exactly matches the supply of labor.
B) It is an above-market wage which increases the firms' profits by increasing the productivity of all factors of production.
C) It is an above-market wage which increases the firms' profits by lowering the costs of searching for,selecting,and training new workers.
D) It is a below-market wage which increases the employment opportunities in an economy and reduces overall poverty.

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