According to the Sticky-Wage Theory, Which Statement Is Consistent with an Unexpected

question 196

Multiple Choice

According to the sticky-wage theory, which statement is consistent with an unexpected increase in the price level?

• A) The real wage rises, and employment rises.
• B) The real wage rises, and employment falls.
• C) The real wage falls, and employment rises.
• D) The real wage falls, and employment falls.

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