Wage Contracts Are Often Set for Periods of Up to Three

question 30

Multiple Choice

Wage contracts are often set for periods of up to three years.As a result,fluctuations in aggregate demand and aggregate supply tend to

• A)cause changes in the amount of involuntary unemployment.
• B)cause greater inflexibility of wages.
• C)have no effect in labour markets until wages are renegotiated.
• D)clear the labour market.
• E)either increase or decrease the NAIRU.

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