Consider the AD/AS Macro Model

question 4

Multiple Choice

Consider the AD/AS macro model.Why do we say that the wage-adjustment process is asymmetrical?

• A)Because factor prices fluctuate more frequently than goods prices.
• B)Because goods prices rise more quickly than factor prices.
• C)Because employers delay wage increases in a boom but lay off workers quickly during a slump.
• D)Because taxes rise quickly in a boom but do not fall during a slump.
• E)Because wages rise quickly in a boom but fall slowly during a slump.