The Downward Nominal Wage Rigidity Hypothesis Says That

question 17

Multiple Choice

The downward nominal wage rigidity hypothesis says that

• A) because people typically resist nominal wage cuts,some amount of inflation can facilitate real wage cuts in industries where they are needed without requiring nominal wage cuts,thus making the labour market more flexible and efficient.
• B) nominal wages are rigid because of union activism.
• C) nominal wages are rigid but real wages are flexible.
• D) both nominal and real wages are rigid because of union activism.
• E) because people typically resist nominal wage cuts,high rates of inflation are needed to facilitate deep real wage cuts and greater economic efficiency.

Learn the steps involved in conducting a Monte Carlo simulation.

Understand how probability distributions are used in simulation models.

Grasp the concept of time compression in simulation and its benefits.

Recognize the flexibility and what-if analysis capability of simulation.

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