Question

The fact that U.S. managers' salaries are substantially greater than those of comparable managers in Japan may be related to

Answer 1

It may be related to the fact that there is an increase in the demand for CEOs in the US compared to Japan. So the correct answer here would be A.

The reason why this could be the correct answer is because if we need more CEOs then the companies would be also willing to pay more to ensure they are that company which gets the best CEOs.

Answer 2

The fact that U.S. managers' salaries are substantially greater than those of comparable managers in Japan may be related to "d. the greater number of public goods provided in the United States," since CEO salaries are usually tied to performance.