Employers gain an advantage in bargaining with workers when

Question

BlackTom AI · Accepted Answer

When evaluating bargaining dynamics between employers and workers, several macroeconomic signals can influence leverage.
Option A: unemployment rates are high. High unemployment typically means more people are vying for fewer available jobs, which weakens workers' bargaining power and strengthens employers' position. This makes it easier for employers to impose wage concessions or less favorable terms. This option aligns with the concept that labor market slack benefits employers in negotiations.
Option B: average prices are rising. While inflation or rising prices affect cost of living considerations, this factor does not directly determine bargaining leverage in the employer-employee negotiation in the way unemployment conditions do. It might influence workers to seek raises, but it does not consistently grant employers the advantage.
Option C: unemployment rates are low. Low unemployment indicates a tighter labor market, where workers have more alternatives and can demand higher wages and better conditions. In such a context, employers typically face higher bargaining costs and less ability to push through unfavorable terms.
Option D: interest rates are low. Low interest rates affect borrowing costs and investment climate but do not directly determine the relative bargaining power of employers versus workers in wage negotiations. The link is more indirect and context-dependent.
Option E: interest rates are high. Similar to Option D, high interest rates influence broader economic conditions but do not by themselves create a consistent advantage for employers in bargaining with workers. The direct lever is the availability of jobs and labor supply, not financing costs.
In sum, the strongest direct association with employers gaining bargaining advantage is when the labor market has more slack, i.e., unemployment is high, which reduces workers' alternative options and elevates employer negotiating power. The other options address inflation signals or financial conditions that do not reliably tilt the balance in favor of employers during wage and work conditions negotiations.

AP/ECON 1010 A - Introduction to Macroeconomics (S1-2025) Graded Quiz 2 (Ch. 5-6) - Available May 9 - Due May 16

Employers gain an advantage in bargaining with workers when

View Explanation

Log in for full answers

Similar Questions

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

The CVP and break-even analysis are supported by a range of important assumptions. Which of the following is not an assumption of the CVP:

The break-even point is that at which:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler