What factors can lead the real wage rate to be above its full-employment equilibrium level?
What will be an ideal response?
There are at least three reasons why the real wage rate might be above its equilibrium level. First, firms might pay an efficiency wage, which is a wage rate set above the full-employment equilibrium wage rate in order to induce greater work effort from workers. Second, a minimum wage law might set a minimum wage that is above the full-employment equilibrium wage rate. Finally, a union might negotiate a wage rate that is above the full-employment equilibrium level.
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The Federal Reserve can influence the exchange rate by
A) changing interest rates. B) buying or selling dollars. C) Both answers A and B are correct. D) None of the above answers is correct.
Most migrants move from developing to developed nations
Indicate whether the statement is true or false
Redistribution of income from the rich to the poor is achieved from a tax system that requires taxes to rise with income. Which of the following criteria best explains the goal of this tax system?
A. stability B. growth C. efficiency D. equity
The major statistics that provide macroeconomists a picture of the health of an economy include the following, except
A. Real gross domestic product B. Inflation statistics C. Prices of oil and gasoline D. Unemployment data