Labor unions are restrained in their wage demands because: legislation limits an
ID: 1197723 • Letter: L
Question
Labor unions are restrained in their wage demands because:
legislation limits annual increases in nominal wages to 6 percent.
the labor demand curve is downsloping.
marginal wage cost curves lie above labor supply curves in most labor markets.
most unions deal with monopsonists who have superior bargaining power.
legislation limits annual increases in nominal wages to 6 percent.
the labor demand curve is downsloping.
marginal wage cost curves lie above labor supply curves in most labor markets.
most unions deal with monopsonists who have superior bargaining power.
Explanation / Answer
Answer: Legislation limits annual increases in nominal wages to 6 percent. Labour unions cannot demand uncontrolled wage rise because there is a control on their demands by legislation. Otherwise economy will start facing wage price spiral.
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