The Argument That the Nominal Wage Is Fixed Because of Long-Term

question 13

Multiple Choice

The argument that the nominal wage is fixed because of long-term labour contracts

• A) explains sticky price models.
• B) closely fits the real world..
• C) does not take into account why such a contract would be written.
• D) explains equilibrium business cycle models..
• E) means that productivity shocks are an important cause of business cycles..

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