Answer to Question #130447 in Macroeconomics for Ashleene

Question

8) General Motors saw the demand for its automobiles drop by 15%. Even though the demand for its automobiles decreased, GM did not cut the wages of its non-unionized workers. This is an example of

A) a relative-wage contract.

B) employment-at-will.

C) an explicit contract not to cut wages.

D) an implicit or social contract not to cut wages.

Answer 1

D) an implicit or social contract not to cut wages.