Efficiency wages do not lead to:
A. structural unemployment.
B. wages above their equilibrium level.
C. lower firm profits.
D. increased worker productivity.
Ans: C. lower firm profits.
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What will be an ideal response?
Suppose you get a tax refund of $20,000 and instead of spending it on items that had been on your wish list for two years, you put it all in your checking account at the First National Bank of Urbana. And if that deposit allows the bank to loan out $17,000 . then the potential money multiplier must be
a. 0.067 b. 0.117 c. 0.667 d. 1.176 e. 6.667
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a. in the short run. b. in the moderate run. c. only in the long run. d. not at all.
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