If output is above its natural rate, then according to sticky-wage theory
a. workers and firms will strike bargains for lower wages. In response to the lower wages firms will produce less at any given price level.
b. workers and firms will strike bargains for lower wages. In response to the lower wages firms will produce more at any given price level.
c. workers will strike bargains for higher wages. In response to the higher wages firms will produce less at any given price level.
d. workers and firms will strike bargains for higher wages. In response to the higher wages firms will produce more at any given price level.
c
You might also like to view...
The most significant international undertaking to prevent worsening of global warming is the
a. Montreal Protocol b. Rio Declaration c. Agenda 21 d. Kyoto Protocol e. None of the above
In a market economy:
a. collective decision-making is more important than individual decision-making. b. goods and services are distributed as if by an "invisible hand" to those who can not afford them. c. profit provides an incentive to be productive. d. the distribution of wealth is equitably distributed.
If the social cost is greater than the private cost in a particular market, the private equilibrium will be at a quantity:
A. greater than or less than the socially optimum level, depending on the size of the external costs. B. equal to the socially optimal level. C. greater than the socially optimal level. D. less than the socially optimal level.
What would the situation be at $1.25 = 1 euro?
a. The value of $1 would be 1.25 euros.
b. The quantity of euros demanded would be greater than the quantity supplied.
c. The foreign exchange market would be in equilibrium.
d. The quantity of euros supplied would be greater than the quantity demanded.