Sticky Wages Amplify Negative Shocks If

question 4

Multiple Choice

Sticky wages amplify negative shocks if:

• A) wages do not fall quickly when there are declines in economic activity.
• B) the initial shock occurs on the supply side of the economy.
• C) the initial shock occurs on the demand side of the economy.
• D) countries utilize the employment-at-will doctrine.

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Definitions:

Causal Factor

An element or factor that brings about a change or results in a particular effect or outcome.

Necessary Condition

a prerequisite that must be met for a certain event or outcome to occur.

Sufficient Condition

A condition or set of conditions that will ensure the occurrence of a particular outcome.

Sufficient Condition

A condition or set of conditions that guarantees the occurrence or the truth of something else but is not always necessary for it to happen.