The idea that changes in investment and changes in national income are mutually reinforcing is the foundation of
a. the sunspot theory
b. the war-induced cycle
c. the housing cycle
d. the innovation cycle
e. internally generated cycles
E
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Answer the following statement(s) true (T) or false (F)
1. An efficiency wage is the wage that maximizes the surplus of the worker. 2. Stockholders can use high levels of compensation and substantial severance payments to get their corporate executives to take on higher levels of risk. 3. A golden parachute is a mechanism that stockholders employ to encourage executives to be more risky than they would be without the parachute. 4. Stock options create the wrong incentive in that they create a principal-agent problem. 5. An unexpected increase in inflation, by diluting the informational content of prices, will lead to an increase in unemployment.
In the above figure, the monopsony wage rate is ________ and the quantity of labor is ________
A) $7.00; 150 hours B) $8.00; 200 hours C) $6.00; 100 hours D) $8.00; 100 hours
Social Security payments are included in personal income
a. True b. False Indicate whether the statement is true or false
For most Third World countries, the key source of capital accumulation is _____
a. internal debt b. foreign direct investment c. domestic business spending d. domestic saving e. foreign aid