Author Question: If a firm hires a worker by paying him a wage lower than his value of marginal product, ________. ... (Read 45 times)

TVarnum · **on:** Jun 30, 2018

If a firm hires a worker by paying him a wage lower than his value of marginal product, ________.

A) firing the worker will increase the firm's profits
B) the firm is making an optimum decision
C) the firm should hire more workers to increase profits
D) profits of the firm are minimized

Question 2

New Keynesian inflation dynamics predicts that an increase in aggregate demand will generate, in chronological order

A) a rightward movement along a horizontal short-run aggregate supply curve, a short-run increase in real GDP, an upward shift in the short-run aggregate supply curve, and an increase in the price level.
B) a leftward movement along a horizontal short-run aggregate supply curve, a short-run decline in real GDP, a downward shift in the short-run aggregate supply curve, and a decrease in the price level.
C) an leftward shift in a vertical short-run aggregate supply curve, a short-run decline in real GDP, an upward movement along the short-run aggregate supply curve, and an increase in the price level.
D) a rightward shift in a vertical short-run aggregate supply curve, a short-run increase in real GDP, an upward movement along the short-run aggregate supply curve, and an increase in the price level.