An efficiency wage is a higher wage paid to reward workers who show greater productivity. Option D is correct.
<h3>What is the Efficiency wage?</h3>
Wages provided to employees over the minimum wage in order to retain a trained and efficient staff are referred to as efficiency wages. Adam Smith defined a type of pay disparity in the 18th century, in which workers in some businesses are paid more than others based on the level of trustworthiness necessary.
Employers establish efficiency salaries above the equilibrium wage rate as an incentive for better employee performance. An efficiency wage is a higher wage provided to employees who are more productive.
Therefore, option D is correct.
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It depends on which way it goes. If the supply increases and prices stay the same, the disposable income increases in a meaningful way. That condition will cause the Fed either to raise interest rates, or the price of goods will respond to the increased demand or a third alternative could be that manufacturers will increase production (not very likely but it could happen).
If the supply of money decreases (by people being laid off for example) then the opposite of all the events listed above will or can occur. The fed could become more accommodating and lower interest rates. The price of good will decrease unless manufacturers increase their inventory (which not really healthy for an economy) or they could decrease production which will further decrease the labor force which will put the economy in an endless vicious cycle -- one no one wants.
Answer:
6%
Explanation:
Current interest rate on one year bond = 5%
Forward interest rate on one year bond = 7%
To Calculate the interest rate on two year bond we use this:
Interest rate = [Current interest rate on one year bond + Forward interest rate on one year bond]/2
Interest rate = [5 + 7]/2 = 12/2 = 6%
Therefore,
The interest rate on two-year bond is equal to 6%.
