The theory of efficiency wages suggests that firms may pay above-equilibrium wages
a. to reduce employee turnover.
b. to prevent unions from recruiting members.
c. to reduce the need for minimum wage laws.
d. to increase the demand for better-skilled workers.
a
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Assume the commercial banking system has checkable deposits of $20 billion and excess reserves of $2 billion when the reserve requirement is 25%. If the reserve requirement is then lowered to 20%, we can conclude that the ________.
A. banking system now has excess reserves of $3 billion B. Fed has decided that money supply needed to be reduced C. monetary multiplier has decreased D. maximum money-creating potential of the banking system has been increased by $7 billion
Compared to a perfectly competitive market, a single-price monopoly sets
A) a lower price. B) the same price. C) a higher price. D) a price that might be higher, lower, or the same depending on whether the monopoly's marginal revenue curve lies above, below, or on its demand curve. E) a price that might be higher, lower, or the same depending on whether the monopoly's marginal cost curve lies above, below, or on its marginal revenue curve.
Frictional unemployment refers to:
a. people who are out of work and have no job skills. b. short periods of unemployment needed to match jobs and job seekers. c. people who spend relatively long periods out of work. d. unemployment related to the ups and downs of the business cycle.
If firms in a monopolistically competitive industry are operating with economic losses, over time we would see
A. some firms exiting the industry, causing the market supply curve to shift to the left, raising price. B. some firms exiting the industry, causing the demand curves of the remaining firms to shift to the right. C. firms alter their advertising rates until they made at least normal profits. D. the firms working together to increase price and everyone's profitability.