In the efficiency wage model, an increase in productivity would
A) increase output but decrease the real wage.
B) decrease the real wage but have no effect on output.
C) increase output but have no effect on the real wage.
D) have no effect on either output or the real wage.
C
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What term means an explosive and seemingly uncontrollable inflation in which money loses value rapidly and may even go out of use?
A) superinflation B) stagflation C) hyperinflation D) maginflation E) deflation
A predatory pricing strategy will have the greatest chance of success when the predatory price is set below the cost of the firm's competitors, new rivals are unlikely to enter after the strategy ends, and profits can be recouped in a relatively
short period of time. Indicate whether the statement is true or false
Assuming a decrease in money demand, then to keep interest rates constant the Fed must
a. keep the money supply constant. b. conduct an open market sale of bonds. c. accommodate the decreased demand for money by the public by increasing the money supply. d. All of the above e. None of the above
Suppose equilibrium income in an economy decreases by $600 as a result of a change in government spending. If the multiplier is 3, what is the change in government spending?
a. Government spending will decrease by $1,800. b. Government spending will decrease by $600. c. Government spending will decrease by $200. d. Government spending will increase by $400. e. Government spending will increase by $1,200.