Which of the Following Best Explains Why Current Employers Do

Multiple Choice

Which of the following best explains why current employers do not seem to reduce wages for existing employees in the short term when the supply for a particular set of skills far outstrips the demand?

A) because of the wage compression phenomenon
B) because of the negative impact on morale
C) because labour budgets tend to be determined on an annual basis
D) because fewer potential employees tend to put upwards pressure on wages