The Existence of Sticky Wages Leads to a Positive Relationship

question 128

Multiple Choice

The existence of sticky wages leads to a positive relationship between the actual price level and the quantity of output supplied

• A)in both the short and long run.
• B)in the short run, but not the long run.
• C)in the long run, but not the short run.
• D)in neither the short nor the long run.

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Definitions:

Direct Labor-Hours

The total hours worked directly on manufacturing goods or providing services.

Manufacturing Overhead

Indirect costs related to manufacturing that do not include direct materials or direct labor.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate overhead costs to products or services.

Machine-Hours

A measure of production output or operational time, calculated by the number of hours machines are running.