If firms are paying efficiency wages, they:
A. may be reluctant to increase nominal wages when aggregate demand increases.
B. are highly vulnerable to import competition.
C. may be targeted for takeover by firms paying market wages.
D. may be reluctant to cut wages when aggregate demand declines.
D. may be reluctant to cut wages when aggregate demand declines.
You might also like to view...
You put money into an account. One year later you see that you have 5 percent more dollars and that your money will buy 6 percent more goods
a. The nominal interest rate was 11 percent and the inflation rate was 5 percent. b. The nominal interest rate was 6 percent and the inflation rate was 5 percent. c. The nominal interest rate was 5 percent and the inflation rate was -1 percent. d. None of the above is correct.
The study of how a particular firm might choose to maximize its profits would fall into what type of analysis?
A) macroeconomics B) microeconomics C) political economics D) aggregate economics