The More Firms That Pay Efficiency Wages,the

question 9

Multiple Choice

The more firms that pay efficiency wages,the

• A) more likely the economy will get stuck in a recessionary gap.
• B) less likely the economy will get stuck in a recessionary gap.
• C) more likely the economy will get stuck in an inflationary gap.
• D) more likely (over time)the economy will produce Natural Real GDP.
• E) b and c

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Definitions:

Acetylcholine

A neurotransmitter involved in many functions including muscle movement, heart rate, and the modulation of brain activity.

GABA

Gamma-Aminobutyric Acid, an inhibitory neurotransmitter in the central nervous system that plays a key role in reducing neuronal excitability throughout the nervous system.

Receptor Downregulation

A decrease in the number of receptors on the surface of target cells, often in response to high levels of a hormone or neurotransmitter.

Cyclic AMP

A second messenger important in many biological processes, involved in the activation of protein kinases and regulation of the effects of adrenaline and glucagon.