In an economic downturn, sticky wages and prices reduce the economy's speed of adjustment because
A) hyperinflation will likely occur.
B) businesses are unable to adjust quickly to changes in aggregate demand.
C) they cause deflation.
D) union workers would likely quit and look for work elsewhere.
B
You might also like to view...
When demand increases,
a. consumers are willing and able to purchase more of the good at every price b. consumers are willing and able to purchase less of the good at every price c. there is a movement to the right along the demand curve d. this is referred to as a change in quantity demanded e. the price will tend to fall
If the price of inputs rises and foreign income rises:
a. Price index falls, and real GDP rises. b. Price index falls, and real GDP falls. c. Price index falls, and the change in real GDP is uncertain. d. Price index rises, and the change in real GDP is uncertain. e. The change in price index is uncertain, and real GDP falls.