Why are firms usually unwilling to lower nominal wages?
What will be an ideal response?
Firms are usually unable or unwilling to cut nominal wages because of contractual restrictions or because of morale problems that would result from falling wages.
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Suppose the market demand curve for pizza can be expressed as QD = 100 - 2P + 3Pb, where QD is the quantity of pizza demanded, P is the price of a pizza, and Pb is the price of a burrito
What is the slope of this demand function, and what information does the slope provide?
The GDP deflator is a
A. price index that tracks the price level of commodities that firms purchase from other firms. B. statistical measure of a weighted average of prices of a specific set of goods and services purchased by wage earners in urban areas. C. statistical measure of a weighted average of prices of commodities that firms produce and sell. D. price index measuring the changes in prices of all new goods and services produced in the economy.