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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The above figure shows a nation's production function. Point C is ________ and ________ because ________
A) attainable; efficient; the nation is using resources efficiently B) unattainable; inefficient; the nation is using resources efficiently but they could be more efficient C) unattainable; efficient; the nation would be using resources efficiently if they could attain this level of production D) unattainable; inefficient; the nation is using resources inefficiently E) attainable; inefficient; the nation is using resources inefficiently
If profits are high because the price level rose,
A) the AS curve shifts leftward. B) it is likely the result of an increase in the real wage rate. C) business failures rise and the quantity of real GDP supplied increases. D) new businesses open and the quantity of real GDP supplied increases. E) potential GDP must be decreasing.
A monopolist faces the inverse demand curve P = 60 - Q. It has variable costs of Q2 so that its marginal costs are 2Q, and it has fixed costs of 30. The monopoly's maximum profit is
A) 220. B) 370. C) 420. D) 510.
If the par value of a bond is $200, and the bid price of the bond is $90, it implies that:
a. the bond is sold at $110. b. the bond was bought at $110. c. the bond is trading at a discount of 10 percent of its par value. d. the bond is trading at 45 percent of its par value. e. the bond is trading at a premium of 15 percent.