Suppose new electronic devices make it easier to monitor the effort levels of workers. If some shirking is still possible in the efficiency wage model, what happens to the level of employment?

A) Increases, but some unemployment remains
B) Increases, and the labor market reaches full employment
C) Decreases
D) Does not change

Efficiency Wage Model

A theory suggesting that higher wages lead to increased productivity by attracting higher quality workers and motivating all workers to avoid being fired.

Level of Employment

Refers to the number of people employed in the economy at any given time, influencing overall economic output.

Electronic Devices

Gadgets that operate on electrical energy, including computers, smartphones, and household appliances.