Efficiency wage theory provides a reason for uncontracted nominal wages to ________ when nominal aggregate demand falls, thus ________ a recession
A) fall proportionately, leading to
B) fall proportionately, preventing
C) remain unchanged, leading to
D) remain unchanged, preventing
C
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The labor force participation rate is the percentage of the adult population that is
A) employed. B) willing to work but unable to find jobs. C) unemployed. D) working or actively looking for work.
Italy has a comparative advantage in which product?
If the FDIC eliminated its insurance program for deposits, then
A. banks would probably hold fewer reserves. B. individual depositors would have more incentive to ascertain the soundness and solvency of the bank. C. moral hazard would be increased. D. the banking system would probably fail.
When people who buy insurance change their behavior after the purchase because they are protected from loss by the insurance, the insurance market is said to face the problem of
A) moral hazard. B) adverse selection. C) asymmetric information. D) economic irrationality.