The idea of efficiency wages is that:
A. the wages of each type of labor must be proportionate to their marginal products.
B. the wages of each type of labor must be equal to their marginal products.
C. firms might get greater work effort by paying above-equilibrium wage rates.
D. workers are more diligent when paid below-equilibrium wages.
Answer is C. firms might get greater work effort by paying above-equilibrium wage rates.
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Required reserves are a % of loans that the bank must set aside in its vault or in its account with its Federal Reserve Bank
a. true b. false
Assuming an economy starts in long-run equilibrium, if the aggregate demand curve were to decrease:
A. the long-run effect would be a lower price level. B. output in the economy would increase. C. prices in the economy would increase. D. the short-run aggregate supply curve would shift left.
Imports are products produced in the home country and sold in another country.
Answer the following statement true (T) or false (F)
A monopoly may arise due to:
A. a patent. B. network externalities. C. large economies of scale. D. All of these