Which of the Following Is Generally True of Nominal Wages

question 116

Multiple Choice

Which of the following is generally true of nominal wages?

• A)In the long run,nominal and real wages tend to be equal.
• B)Nominal wages are more flexible downward than upward.
• C)Nominal wages are more flexible than prices.
• D)Sustained and continuous (cyclical)unemployment suggests nominal wages do not fall quickly.
• E)Nominal wages do not rise during labor shortages.

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Definitions:

Interest Rate

The percentage at which interest is paid by a borrower for the use of money they borrow from a lender, often expressed as an annual percentage rate (APR).

Multiplier

In macroeconomics, a factor that quantifies how an initial change in spending will affect total economic output.

Crowding-out Effects

The phenomenon where increased government spending leads to a reduction in private sector spending.

Supply-siders

Supply-siders are economists or policymakers who believe that reducing tax rates and regulatory barriers to production and investment can stimulate supply, leading to economic growth.