A firm uses an efficiency wage scheme to deter workers from shirking, which is detected 10% of the times. Suppose a risk-neutral worker that has a reservation wage of $500. The industry ongoing wage is $1000. What is the efficiency wage paid by this firm?
A) $6,000
B) $5,000
C) $1,500
D) $2,000
A
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Referring to the graph above, an economic variable that had peaked in December 1912, November 1914, and February 1918 is likely a ________ variable
A) leading countercyclical B) leading procyclical C) lagging countercyclical D) lagging procyclical E) none of the above
Which of the following would lead the Fed to increase the money supply under an interest rate rule?
a. an unexplained decrease of money demand b. an increase in taxes c. a decrease in spending that caused the money demand curve to decrease d. an increase in spending that caused the money demand curve to increase e. a decrease in government spending
Income is created when
a. individuals supply others with productive resources that they value. b. the government levies taxes on some and transfers the revenues to others. c. the general level of prices increases. d. shares of stock are sold from their current owner to another party.
If the price of a good is low,
a. firms would increase profit by increasing output. b. the quantity supplied of the good could be zero. c. the supply curve for the good will shift to the left. d. firms can and should raise the price of the product.