Ellen decides to hire some additional workers for her vinyl siding factory. The equilibrium wage is $14 per hour. Efficiency wage theory suggests that it is reasonable for Ellen to offer
$14 per hour.
less than $14 per hour, since some people would be willing to work for less.
less than $14 an hour to prevent shirking.
more than $14 per hour, so as to attract a better pool of applicants.
The Federal Reserve does all except which of the following?
It controls the supply of money.
It acts as a lender of last resort to banks.
It makes loans to large business firms.
It tries to ensure the health of the banking system.
The money supply decreases if the Fed
sells Treasury bonds. The larger the reserve requirement, the larger the decrease will be.
sells Treasury bonds. The smaller the reserve requirement, the larger the decrease will be.
buys Treasury bonds. The larger the reserve requirement, the larger the decrease will be.
buys Treasury bonds. The smaller the reserve requirement, the larger the decrease will be.
The Fed increases the reserve requirement and makes open market purchases. Which of these by itself will increase the money supply?
neither the increase in the reserve requirement nor the open market purchases
both the increase in the reserve requirement and the open market purchases
only the increase in the reserve requirement
only the open market purchases
The value of money falls as the price level
falls, because the number of dollars needed to buy a representative basket of goods falls.
rises, because the number of dollars needed to buy a representative basket of goods rises.
rises, because the number of dollars needed to buy a representative basket of goods falls.
falls, because the number of dollars needed to buy a representative basket of goods rises.
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