(A) With less powerful trade unions, the wage-setting curve in the US rapidly fell back, leading to lower wages and higher unemployment. (B) With a powerful centralised labour movement, the wage-setting curve was kept high in Sweden, causing high wage demand, low profits, and low unemployment. (C) Due to the strong bargaining position of workers, the oil shock primarily hit employers, redistributing income from profits to wages, causing an end to the fair-shares bargaining (the postwar accord) in the US. (D) The golden age ended because of aggregate demand problems, caused by the oil shocks of the 1970s.
The diagram describes the general movements in employment, profits, and wages in the 1950s to 1970s, using the labour market model. In addition, note that the postwar accord collapsed in the US in the 1960s, while it survived in Sweden. Which of the following statements regarding this period is correct?\
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(A) With less powerful trade unions, the wage-setting curve in the US rapidly fell back, leading to lower wages and higher
(B) With a powerful centralised labour movement, the wage-setting curve was kept high in Sweden, causing high wage demand, low profits, and low unemployment.
(C) Due to the strong bargaining position of workers, the oil shock primarily hit employers, redistributing income from profits to wages, causing an end to the fair-shares bargaining (the postwar accord) in the US.
(D) The golden age ended because of aggregate demand problems, caused by the oil shocks of the 1970s.
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