Feedback 5 – Labour Market, Exchange Rate Market & Financial Market
1) Mary Sue is the newly appointed CEO of a company that manufactures CD drives on an assembly line. Her staff has told her that the output the firm produces, given the number of workers employed, indicates that some workers may be shirking. According to efficiency wage theory, what should she do? a) Pay all workers more than the equilibrium wage rate
b) Pay all workers below the equilibrium wage rate to make up for the loss from shirking c) Make sure that workers are getting paid exactly the equilibrium wage rate d) None of the above is correct according to efficiency wage theory.
2) Which of the following have a tendency to raise the unemployment rate? a) The establishment of effective trade unions in an economy b) Firms deciding to pay efficiency wages in an economy
c) Implementing a minimum wage in an economy
d) All of these are correct.
3) Which of the following causes the official measure of the unemployment rate to understate the true extent of joblessness? a) People who collect unemployment benefits report themselves to be searching for a job. b) Discouraged workers are not counted as unemployed.
c) Many full time workers really want to be part time workers.
4) Trade unions cause unemployment because the union contract wage is set a) above the market wage, causing a shortage of labour.
b) below the market wage, causing a surplus of labour.
c) below the market wage, causing a shortage of labour.
d) above the market wage, causing a surplus of labour.
5) Which of the following explanations are consistent with the Figure above? a) Speculators think that the value of the dollar relative to the euro will rise. b) A recession in the European Union
c) An increase in Australian interest rates relative to interest rates in other countries d) An increase in incomes in the European Union
6) When the dollar...
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