In a Recessionary Gap,the Implications of Downward Wage Inflexibility Are

question 85

Multiple Choice

In a recessionary gap,the implications of downward wage inflexibility are that there will be

• A) further leftward shifts of AD that worsen unemployment.
• B) no further leftward shifts of AD, allowing the shifts in SRAS to close the gap.
• C) no further leftward shifts of SRAS, allowing the shifts in AD to close the gap.
• D) no rightward shifts of SRAS, allowing for persistent high unemployment.

---

Definitions:

Psychological Contract

An unwritten set of expectations existing between an employer and employees regarding mutual obligations, benefits, and commitments.

Distributive Justice

A concept in social science and philosophy regarding the fair distribution of resources and benefits among members of a society.

Procedural Justice

The fairness of the processes used to make decisions, particularly in terms of how individuals believe they are treated by authorities or organizations during those processes.

Voluntary Sabbaticals

Planned, extended leaves of absence from work, initiated by the employee, often for personal growth, travel, or study.