The Efficiency Wage Theory

According to the Efficiency Wage Theory firms can operate more efficiently and become more productive if they pay wages above the equilibrium level. There are actually four different theories, according to which firms can benefit in four different ways from paying efficiency wages: higher employee effort, lower employee turnover, attracting higher quality employees, and more […]

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The Unemployment Rate

The unemployment rate refers to the share of the total labor force that is without a job but actively seeking work. It is one of the broadest and most widely available indicators of economic activity. In every economy there are always some people who lose or quit their jobs, while others […]

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