Nominal Wages Are Sticky Because

question 33

Multiple Choice

Nominal wages are sticky because:

• A) wages are slow to rise when there are labor shortages and slow to fall even when the level of unemployment is significant.
• B) wages remain fixed in the long run, increasing the profitability of the firms.
• C) wages are slow to fall when there are labor shortages and slow to rise even when the level of unemployment is significant.
• D) in the long run all wages are adjusted for inflation.

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Definitions:

Health Care Expenditures

The total amount of money spent on health care services and products within a specific period.

Total Product Curve

A graphical representation showing how the total output of a firm varies with the level of a single input, keeping other inputs constant.

Consumer Incomes

The total amount of income earned by consumers, influencing their purchasing power and demand for goods and services.

Average Product

The output produced, on average, by each unit of a variable input, such as labor.