Yohanna, the CEO of a Corporation Operating in Ethiopia, Decides

Multiple Choice

Yohanna, the CEO of a corporation operating in Ethiopia, decides to raise the wages of her workers, even though she faces an excess supply of labour. Which of the following is an expected result from her decision?

A) It will increase productivity, according to the efficiency wage theory.
B) It will help eliminate the excess supply of labour if she raises it sufficiently.
C) It will attract a larger pool of workers to fill vacancies but of lesser quality.
D) It will decrease profits, according to the efficiency wage theory.