An efficiency wage is a wage that:
A. the government sets deliberately above the market rate to increase equity.
B. most unionized workers negotiate to get rid of.
C. is deliberately set above the market rate to increase worker productivity.
D. is set right at market equilibrium which creates an efficient labor market.
C. is deliberately set above the market rate to increase worker productivity.
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By the end of the 1960s, fiscal activism was falling out of favor due to its long ________ lag and, as predicted by the permanent-income hypothesis, the ________ of the 1968 tax surcharge
A) legislative, ineffectiveness B) legislative, overstimulation C) effectiveness, ineffectiveness D) effectiveness, overstimulation
According to classical macroeconomic theory, if real GDP is below the full-employment level, then an increase in aggregate demand will result in which of the following changes in equilibrium?
a. Real GDP will rise, but the price level will remain constant. b. Real GDP and the price level will both rise. c. Real GDP will remain unchanged but the price level will rise. d. None of the above.
Because of the European Monetary Union, each EU member is now:
A. less able to manage its own economy. B. less susceptible to internal shocks. C. less susceptible to external shocks. D. better able to manage its own economy.
Monetarism is a school of thought put forth by ________, who argued that the economy would ordinarily be at potential GDP
A) Karl Marx B) Milton Friedman C) Finn Kydland and Edward Prescott D) Robert Lucas and Thomas Sargent