Question

Suppose that the mythical country moricana has a very high minimum wage. labor market laws are trade​ union-friendly and allow unions a high degree of bargaining power. moricana is in a recessionlong dashcapacity utilization in the economy is at an​ all-time low, surveys show that firms do not expect economic conditions to improve in the coming year. firms in the country are cutting back on capital spending and investment. in​ moricana, wages are likely to be​ ____________.

Answer 1

Answer:

Explanation:

You would expect for wages to be stagnant at this point. With a heavily unionized workforce, you would expect to see little to no downward movement in wages. In a more competitive market, the outlined forces would lead to a decrease in overall wages, but this is unlikely with a union presence.