Which of the following pairs help explain why self-correction from a decline in aggregate demand in the economy may be slow rather than rapid?
A. Theory of compensation wage differentials; theory of derived demand for labor.
B. Efficiency wage theory; insider-outsider theory.
C. Insider-outsider theory; principle-agent problem.
D. Externalities; efficiency wage theory.
B. Efficiency wage theory; insider-outsider theory.
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Surpluses cause prices to rise while shortages cause prices to fall
a. True b. False Indicate whether the statement is true or false
John only works in the summer between semesters. What type of unemployment is he experiencing?
a. Frictional b. Seasonal c. Structural d. Cyclical
A monopolist's profit-maximizing price and output correspond to the point on a graph
A) where average total cost is minimized. B) where total costs are the smallest relative to price. C) where marginal revenue equals marginal cost and charging the price on the market demand curve for that output. D) where price is as high as possible.
To close a recessionary gap using fiscal policy, the government can:
a. increase government spending by the size of the gap. b. decrease government spending by the size of the gap. c. increase government spending by more than the size of the gap. d. increase government spending by less than the size of the gap. e. decrease government spending by more than the size of the gap.