The Relative-Wage Explanation for the Existence of Downwardly Sticky Wages

question 25

Multiple Choice

The relative-wage explanation for the existence of downwardly sticky wages emphasizes

• A) unspoken agreements between workers and firms that firms will not cut wages.
• B) the incentive that firms may have to hold wages above the market clearing rate.
• C) employment contracts that stipulate workers' wages, usually for a period of one to three years.
• D) the contention that workers in one industry may be unwilling to accept a wage cut, unless they know that workers in other firms and industries are receiving similar cuts.

---

Definitions:

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its share price.

Annual Dividend

The total payout a shareholder receives from a company's earnings over one year, distributed per share.

5-day SMA

The average of a security's closing prices over the last 5 days, often used to identify trends.

Spreadsheet

A digital worksheet used for organizing, analyzing, and storing data in tabular form, often featuring calculation functionalities.