Nominal Wages React Slowly to Changes in Output for the Following

question 95

Multiple Choice

Nominal wages react slowly to changes in output for the following reasons,except one.Which is the exception?

• A) The nominal wage may be fixed and independent of output because of labor contracts that last up to three years.
• B) The real wage remains constant despite changes in output.
• C) Firms with a reputation for paying stable nominal wages will find it easier to attract new workers.
• D) Changing the nominal wage can be costly to firms.
• E) Nominal wages may be set by slow-moving corporate bureaucracies.