Practice mode Income Inequality

What are wage differences caused by differences in working conditions known as?

Correct answer D. Compensating differentials

Explanation

Compensating differentials make up for the non-monetary drawbacks of a job, such as danger, dirt or unsocial hours. Adam Smith noted this tendency for pay to balance out job conditions.

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What are wage differences caused by differences in working conditions known as?

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What are wage differences caused by differences in working conditions known as?

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