One Explanation for Why Wages Adjust Slowly and with a Substantial

question 36

Multiple Choice

One explanation for why wages adjust slowly and with a substantial lag to changes in aggregate demand is

• A) the presence of formal multiyear labor contracts in unionized industries.
• B) the widespread practice of profit-sharing plans as part of most employee compensation packages.
• C) that such changes have little or no impact on rates of unemployment because the short-run aggregate supply curve is vertical.
• D) that labor markets clear readily without changes in wage rates.
• E) a belief by most workers that real wages are unaffected by changes in the price level.

---

Definitions:

Federal Trade Commission

A United States federal agency with the primary goal of protecting consumers and ensuring a strong competitive market by enforcing antitrust and consumer protection laws.

President

The elected head of a republic, serving as both head of state and government, or the chief executive officer of a corporation or organization.

Food And Drug Administration

A federal agency of the United States Department of Health and Human Services, responsible for protecting and promoting public health through the control and supervision of food safety, tobacco products, dietary supplements, prescription and over-the-counter pharmaceutical drugs, vaccines, biopharmaceuticals, medical devices, and veterinary products.

Tobacco Products

Items made wholly or in part from the tobacco plant and are intended for human consumption, including but not limited to cigarettes, cigars, pipe tobacco, and chewing tobacco.