Which of the following is a plausible explanation for a firm paying above-equilibrium wages to its workers?
a. It increases the probability that a worker who shirks will be caught.
b. It discourages workers from shirking out of fear of losing their high-paying job.
c. The Condorcet Paradox suggests that paying high wages will result in greater effort by employees.
d. By paying a high wage, employers solve this adverse selection problem and motivate the employees to work harder.
b
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Suppose the price level is unchanged and real GDP rises. Then
A) nominal GDP must decrease. B) nominal GDP must remain unchanged. C) nominal GDP must increase. D) none of the above are true.
Built-in stability means that:
A. an annually balanced budget will offset the procyclical tendencies created by state and local finance and thereby stabilize the economy. B. with given tax rates and expenditures policies, a rise in domestic income will reduce a budget deficit or produce a budget surplus while a decline in income will result in a deficit or a lower budget surplus. C. Congress will automatically change the tax structure and expenditure programs to correct upswings and downswings in business activity. D. government expenditures and tax receipts automatically balance over the business cycle,
Which one of the following is an example of the circular flow model and shows the interdependence of households and firms?
a. Households demand their resources from the firms in the factor markets and, in turn, supply in the product market the goods and services produced by firms. b. The firms go to the resource market to supply resources that households demand and, in turn, provide households with the goods and services produced for the product markets. c. Households supply their resources to the firms in the factor markets and, in turn, demand in the product market the goods and services produced by the firms. d. The firms in the factor markets pay to households in the form of wages, interest, rent and profit?for resources demanded. e. The circuit is completed when the payments flow from households, through the product markets, and to the firms for the goods and services they demand.
Suppose you inherit an orange orchard and it generates an annual return of $16,000 . You want to sell it. The interest rate is 8 percent. What should you expect to receive for it?
a. $1,280 b. $2,400 c. 200,000 d. 192,000 e. not enough information is given