Which of the following is not true regarding the incentives different pay structures impose on workers?
A. Piece rates are an option when individual output is easily measured by firms.
B. Tournaments can elicit more effort than a time rate.
C. Worker productivity is unrelated to the pay structure.
D. Profit sharing is a pay structure designed to elicit more effort from workers, but it can suffer from free-riding.
E. Worker effort can be a function of the pay structure.
Answer: C
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The U.S. fiscal policy implemented in 2008 was an attempt to
A) give billions of dollars to businesses and low- and middle-income Americans in order to stimulate business investment and consumption expenditure, and thereby increasing AD. B) give billions of dollars to businesses and low- and middle-income Americans in order to stimulate business investment and consumption expenditure, and thereby increasing SAS. C) decrease interest rates in order to stimulate business investment and consumption expenditure, and thereby increasing AD. D) decrease the exchange rate in order to boost net exports, and thereby increasing AD.
Tunitra consumes at a point on her budget line where her marginal rate of substitution exceeds the magnitude of the slope of her budget line. As Tunitra moves toward her consumer equilibrium point, she will move to a
A) lower budget line. B) higher budget line. C) lower indifference curve. D) higher indifference curve.
If a central bank engages in an unsterilized foreign-exchange intervention with the intention of raising the foreign-exchange value of its currency,
A) the central bank's holdings of international reserves will fall. B) the domestic money supply will rise. C) domestic interest rates will fall. D) it will buy foreign assets.
Refer to Figure 6.6. What area represents the compensation for reduced consumption that results from an increase in the price of gasoline from $1.75 to $3.00 per gallon?
A. a + b
B. a + b + e
C. c + d + e
D. d + e