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.

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Definitions:

Tibia

The larger and stronger of the two bones in the lower leg, also known as the shinbone, primarily responsible for bearing weight.

Medial Cuneiform

A bone located in the medial part of the foot's arch, part of the tarsal bones that helps in foot stability and movement.

Distal Phalanx

The small bone at the tip of the fingers and toes, being furthest from the body.

Intermediate Cuneiform

A bone in the human foot located between the other two cuneiform bones and connects to the second metatarsal.