If All Firms Are Paying Efficiency Wages and Nominal Aggregate

question 31

Multiple Choice

If all firms are paying efficiency wages and nominal aggregate demand falls,then between maintaining nominal wages and reducing them firms generally find it more profitable to ________ them,thus ________ the unemployment rate.

• A)maintain,increasing
• B)maintain,maintaining
• C)reduce,increasing
• D)reduce,maintaining

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Definitions:

Cash Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting liabilities, representing the ownership interest of shareholders.

Preferred Dividends

Dividends that are paid to preferred shareholders before any dividends are paid to common shareholders.

GAAP

GAAP, or Generally Accepted Accounting Principles, are a set of accounting standards and procedures used in the United States to govern financial reporting and ensure consistency across industries.