Sticky wages occur because:
A. unions often negotiate wages for several years in advance.
B. wages can only be changed at the end of contracts, as opposed to final good prices which can change anytime.
C. employers must wait until the current contract ends to cut someone's pay.
D. All of these are true.
Answer: D
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Canada and the United States produce computers and chemicals using labor and capital as the only inputs in production. The United States is capital abundant, and Canada is labor abundant. Computer production is more labor intensive than chemical production in both countries. What does the HeckscherOhlin model predict will happen to prices of computers or chemicals in the two countries?
a. The price of chemicals should rise in the United States. b. The price of chemicals should fall in the United States. c. The price of computers should fall in Canada. d. The price of chemicals should rise in Canada.
If the price of pizza falls, the demand for pizza will rise
a. True b. False Indicate whether the statement is true or false