The Sticky-Wage Theory of the Short-Run Aggregate Supply Curve Says

question 77

Multiple Choice

The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected,

• A)production is more profitable and employment rises.
• B)production is more profitable and employment falls.
• C)production is less profitable and employment rises.
• D)production is less profitable and employment falls.

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Definitions:

Par Values

The nominal or face value of a stock or bond as stated by the issuer, fundamental in understanding stock issuance and bond pricing.

Yield To Maturity

The total return expected on a bond if held until it matures, considering all interest payments made over the life of the bond and its redemption value.

4-Year Bond

A debt security that matures in four years from the issuance date.

Forward Rate

An interest rate agreed today for a loan to be made or a bond to be purchased at a future date.