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AP® Macroeconomics

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Wages and Productivity

APMACR-UPXDXY

Some retailers offer jobs only at minimum wage while other retailers selling similar goods in the same markets offer much higher paying jobs with better benefits.

Which of the following answers best explains why a firm would want to pay higher wages when competing against firms paying lower wages?

I. High wage earners have higher motivation levels

II. Paying higher wages increases the applicant pool.

III. Avoid absenteeism and increase productivity

A

I Only

B

II Only

C

III Only

D

I and II

E

I, II, and III