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.

---

Definitions:

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor used to create the product.

LIFO

An inventory valuation method that assumes the items most recently put into inventory are the first ones sold.

Ending Inventory

The overall worth of items ready for sale after an accounting period, determined by starting inventory added to purchases and then subtracting the cost of goods sold.

Periodic Inventory System

An inventory accounting system where updates to the quantity and cost of inventory are made at specified intervals, such as monthly or yearly, not continuously.