The new Keynesian theories of efficiency wages imply
a. nominal wage rigidity.
b. real wage rigidity.
c. changes in unemployment represent changes in the natural rate of unemployment.
d. market clearing in the labor market in the long-run.
e. None of the above
A
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The uncertainty about the return an asset will earn is
A) liquidity. B) risk. C) time to maturity. D) stochastic dominance.
If labor supply is perfectly inelastic, the imposition of a payroll tax legislated to be paid by firms will do all of the following except
A. reduce the wage rate by exactly the amount of the tax. B. generate tax revenue paid to the government. C. leave employment levels unchanged. D. reduce total output. E. leave firm profits unchanged.
Refer to the above diagram, in which Qf is the full-employment output. If the economy's current aggregate demand curve is AD0, it is experiencing:
A. a negative GDP gap. B. a positive GDP gap. C. inflation. D. an adverse supply shock.
In the early 1930s
A) countries that abandoned the gold standard suffered severe inflation. B) countries that tried to defend the gold standard suffered more depression than countries that abandoned the gold standard. C) the gold standard was abandoned by every major industrial country except England. D) the United States was the first major industrial country to abandon the gold standard.