Assuming no change in the effort curve of employees, the efficiency wage model implies that
A) the real wage is rigid and equals the efficiency wage.
B) the real wage exceeds the marginal productivity of labor.
C) an increase in the marginal productivity of capital will increase the real wage.
D) the real wage is procyclical.
A
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Suppose an increase in the price of hamburger from $3 to $4 leads to an increase in quantity supplied from 100 units to 150 units. At the original price, the price elasticity of supply for hamburgers is ________ so supply is ________.
A. 3/2; inelastic B. 2/3; elastic C. 2/3; inelastic D. 3/2; elastic
If policymakers implement an expansionary fiscal policy but do not take into account the potential for crowding out, the new equilibrium level of GDP is likely to
A) be at potential GDP. B) be below potential GDP. C) be above potential GDP. D) There is insufficient information given here to draw a conclusion.
If the value of a country's merchandise exports is less than the value of its merchandise imports, it is said to have a
a. trade surplus. b. trade deficit. c. current account surplus. d. capital account deficit.
Assume the current interest rate is 25%. The present value of $1,000 in one year would be
A. $180. B. $450. C. $750. D. $800.