In the Keynesian model, the real wage is mildly procyclical because
A. the supply of labor fluctuates with the business cycle.
B. firms take advantage of recessions to pay slightly lower wages, since there's excess labor supply.
C. demand for labor fluctuates with the demand for final goods.
D. workers' effort may depend on the unemployment rate and the real wage.
Answer: D
You might also like to view...
In 2015, the U.S. auto industry experienced rising sales. The automobile industry was experiencing the effects of
A) the underground economy. B) inflation. C) the business cycle. D) depreciation.
In the presence of a negative externality
a. the market marginal benefit curve lies above the market supply curve b. a market will produce less than the efficient quantity c. the market price will be too high for an efficient solution to exist d. the marginal social cost curve lies above the market supply curve e. Pareto optimality is automatically guaranteed