Question Detail

IRP 321 Compensation Management policies Objective Question

In the classical economic theory of compensation, what is the predicted effect on pay levels if the supply of labour exceeds the demand for labour?

A Pay levels go up

B Pay levels remain stable

C Pay levels go down

Correct Answer

D Pay levels fluctuate unpredictably

Option C is the correct answer.

Page 18 states: '1. The classical economic theory: If supply of labour exceeds the demand for labour, pay levels go down...'

Consider basic supply and demand principles in economics.

Course: IRP 321

Topic: Compensation Management policies

Type: Objective

Difficulty: Not specified