The Social Contract Explanation for the Existence of Downwardly Sticky

question 79

Multiple Choice

The social contract explanation for the existence of downwardly sticky wages focuses on

• A) employment contracts that stipulate workers' wages, usually for a period of one to three years.
• B) the contention that workers in one industry may be unwilling to accept a wage cut, unless they know that workers in other industries are receiving similar cuts.
• C) unspoken agreements between workers and firms that firms will not cut wages.
• D) the incentive that firms have to hold wages above the market clearing rate.

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Definitions:

Neurotransmitters

Chemical substances that transmit signals across a synapse from one neuron to another in the brain.

Functions

Predetermined roles or actions that an entity or process serves or performs within a system.

Pancreas

A gland located behind the stomach that produces digestive enzymes and hormones, including insulin.

Insulin

A hormone produced by the pancreas that regulates blood glucose levels by facilitating the uptake of glucose into tissues.