Which of the Following Is a Source of Wage Stickiness

question 40

Multiple Choice

Which of the following is a source of wage stickiness?
I. fixed wage contracts
II. minimum wage laws
III. workers and firms want to avoid complexity of negotiating contracts frequently

• A) I only
• B) I and II only
• C) I and III only
• D) I, II, and III

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Definitions:

Unemployment

The situation where individuals who are able and willing to work do not find jobs, expressed as a percentage of the labor force.

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), reflecting the real quantity of goods and services produced.

Military Spending

Financial allocation by a government for the maintenance and operation of armed forces, including expenses related to salaries, equipment, training, and facilities.

Automatic Stabilizer

Economic policies and programs designed to offset fluctuations in a nation's economic activity without additional government action, such as progressive tax rates and unemployment benefits.