5When the government\'s budget deficit increases a. the government is borrowing
ID: 1226634 • Letter: 5
Question
5When the government's budget deficit increases
a.
the government is borrowing less and public savings falls.
b.
the government is borrowing less and public savings increases.
c.
the government is borrowing more and public savings falls.
d.
the government is borrowing more and public savings increases.
6 A firm may pay efficiency wages in an attempt to
a.
entice workers to work the night shift rather than the day shift.
b.
improve productivity by reducing turnover.
c.
reduce costs by attracting the least-skilled workers to apply for job vacancies.
d.
All of the above are correct.
7Cyclical unemployment refers to
a.
the portion of unemployment created by job search.
b.
short-run fluctuations around the natural rate of unemployment.
c.
changes in unemployment due to changes in the natural rate of unemployment.
d.
the portion of unemployment created by wages set above the equilibrium level.
8
Efficiency wages?
a.
may increase productivity.
b.
will increase unemployment.
c.
may improve worker health.
d.
All of the above are correct.
12 Demand deposits are a type of
a.
checking account.
b.
time deposit.
c.
money market mutual fund.
d.
savings deposit.
Explanation / Answer
5. C. the government is borrowing more and public savings falls.
As Budget deficit occurs when government spending more then it's earning, hence when budget is in deficit, government borrowing increases and public saving falls.
As
Public Savings = T - G
where:
G - Government Spending
T - Taxation
6. b. improve productivity by reducing turnover.
As efficiency wages are above normal wages, so by paying efficiency wages firm could reduce turnover and hence could might increase the productivity
7. c. short-run fluctuations around the natural rate of unemployment.
Cyclical unemploynment is due to the flucuaton in the business cycle and hence are short term fluctuations.
8. b. may increase productivity.
As efficiency wages are above normal wages, so by paying efficiency wages firm could reduce turnover and hence could might increase the productivity
12 a. checking account.
As demand deposits can be converted into cash at anytime, so same as checking account.
If you don't understand anything then comment, I'ill revert back on the same. :)
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