If Nominal Wages Are Sticky in the Downward Direction

question 172

Multiple Choice

If nominal wages are sticky in the downward direction,

• A)unemployment may persist for long periods of time
• B)shortages of labor may persist for long periods of time
• C)increases in real wages will happen too quickly to affect unemployment
• D)nominal wage increases will reduce the price level
• E)decreases in nominal wages will increase the inflation rate

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Definitions:

Recent Data

Information or statistics that have been collected in the near past and are up-to-date.

Long-Term Trend

A persistent movement in data over a long period, indicating a general direction.

Annual Time Series

Data collected or recorded at yearly intervals, often used for analyzing trends over time.

Data Pattern

The recognizable way that data may be organized or follow a specific arrangement, suggesting trends or relationships.