Chapter Questions
Explain the efficiency wage hypothesis.
How does the efficiency wage hypothesis help to achieve equilibrium in output and employment? Discuss.
What is the concept of the staggered wage contract?
Explain the government budget constraints.
Debt and gross domestic product is related to interest rate? Explain.
Examine the primary deficit and its stability.
What is rational expectation hypothesis? Explain.
Explain the Lucas supply curve in detail.
Why is the Lucas supply curve criticized?
Explain the term Ricardian equivalence.
What is the implicit contract? How does it help firms to decide the wages?
Why implicit contracts are criticized by the policy makers?