A . Can you explain why some employees who work for monopsonists might feel that they are underpaid? b. Why can't the firm raise their wage rates to keep them from feeling this way?
a . They realize that their MRP is higher than their wage rate. Their contribution to the firm's revenues is
higher than the wages that they earn.
b. The firm can't afford to raise the wage rate for an employee whose MRP exceeds his/her wage rate,
since doing so would mean raising wages for all other employees, too. The marginal labor cost of the
raise would exceed the MRP of the worker, and firms will not hire workers when their MLC exceeds
their MRP.
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When mismatch unemployment characterizes an economy
A) monetary and fiscal policies to raise AD are the appropriate government action. B) only monetary policy will be effective. C) monetary and fiscal policies to raise AD are not the appropriate government action. D) only general (not specific) fiscal policy will be effective.
To expand the money supply the Fed could lower the required reserve ratio, lower the discount rate, or purchase government securities
Indicate whether the statement is true or false