Your boss wants to know if you should lay off any workers. You answer that you should lay off workers if the
A. marginal revenue product of labor is equal to the nominal wage rate.
B. marginal revenue product of labor is greater than the nominal wage rate.
C. marginal product of labor is greater than or equal to the real wage rate.
D. marginal product of labor is less than the real wage rate.
Answer: D
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Business finance companies
A) purchase accounts receivable of small firms at a discount. B) sell commercial paper and buy long-term corporate bonds. C) take in deposits from savers and buy corporate commercial paper. D) are strictly regulated by state governments.
The equation of exchange ________
A) states that the quantity of money multiplied by velocity must equal nominal income in a given year B) describes a relationship that is true by definition C) shows that real GDP must equal real money balances times the number of times a dollar turns over in a year D) all of the above E) none of the above
Which of the following is not an advantage of a global currency?
a. International transactions would have fewer transactions costs. b. Travel would be simplified. c. A global currency would foster competition due to increased price transparency. d. All of these are advantages.
Crowding out is most likely to occur when the federal government
A. Runs a deficit and raises taxes to generate more revenue. B. Runs a surplus and pays off part of the debt. C. Has a balanced budget and refinances a portion of the debt that matures. D. Runs a deficit and sells bonds to make up the difference.