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Implicit Contract Theory of Wages

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Implicit Contract Theory of Wages? One argument is that even employees who are not union members often work under an implicit contract, which is that the employer will try to keep wages from falling when the economy is weak or the business is having...

Adverse Selection of Wage Cuts Argument

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Adverse Selection of Wage Cuts Argument? The adverse selection of wage cuts argument points out that if an employer reacts to poor business conditions by reducing wages for all workers, then the best workers, those with the best employment alternatives at...

Measuring Unemployment

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What are the Issues with Measuring Unemployment?  There are always complications in measuring the number of unemployed. For example, what about people who do not have jobs and would be available to work, but are discouraged by the lack of available jobs in their area...

Unemployment Insurance – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

How does U.S. unemployment insurance work? Unemployment insurance is a joint federal–state program that the federal government enacted in 1935. While the federal government sets minimum standards for the program, state governments conduct most of the administration....

Efficient Wage Theory

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Efficient Wage Theory? Efficiency wage theory argues that workers’ productivity depends on their pay, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate. One reason is that...
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