Final answer:
Adverse selection in hiring and recruiting occurs when the wrong kinds of workers are attracted to a firm. In adverse selection, the best workers are more likely to leave when wages are reduced for all workers, while the least attractive workers are more likely to stay.
Step-by-step explanation:
The statement is True. Adverse selection refers to a situation in hiring and recruiting where the wrong kinds of workers are attracted to a firm. In the context of adverse selection, employers may experience a situation where the best workers, who have better employment alternatives, are more likely to leave when wages are reduced for all workers. On the other hand, the least attractive workers, who have fewer alternatives, are more likely to stay.