In the efficiency wage model, if the real wage is higher than the market-clearing wage so that there is an excess supply of labor,
A. firms will hire new workers at lower wages.
B. firms will replace high-paid workers with low-paid, formerly unemployed workers.
C. firms will demand a higher level of effort from existing employees.
D. employers will not hire workers who are willing to work for a lower wage.
Answer: D
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With the creation of the Federal Deposit Insurance Corporation
A) member banks of the Federal Reserve System were given the option to purchase FDIC insurance for their depositors, while non-member commercial banks were required to buy deposit insurance. B) member banks of the Federal Reserve System were required to purchase FDIC insurance for their depositors, while non-member commercial banks could choose to buy deposit insurance. C) both member and non-member banks of the Federal Reserve System were required to purchase FDIC insurance for their depositors. D) both member and non-member banks of the Federal Reserve System could choose, but were not required, to purchase FDIC insurance for their depositors.
The supply-siders argue that investment is
a. primarily a function of current income. b. highly responsive to changes in after-tax real interest rates. c. primarily a function of expectations. d. both a and b.
Jenni can change a car's oil in 10 minutes and clean a bathroom in 20 minutes. Rob can change a car's oil in 20 minutes and clean a bathroom in 10 minutes. Therefore,
a. Jenni should clean the bathroom and Rob should change the car's oil b. Rob should clean the bathroom and Jenni should change the car's oil c. there are no gains from specialization d. Rob has an absolute advantage in both activities e. Jenni has an absolute advantage in cleaning the bathroom
If the MPC is 0.70, then the income multiplier is equal to
a. 0.70 b. 0.30 c. 0.14 d. 3.33 e. 5