For macroeconomists the short run is a period in which wages (a) do not respond to price level...
Question:
For macroeconomists the short run is a period in which wages
(a) do not respond to price level changes
(b) decrease
(c) respond quickly to price level changes
(d) increase.
Sticky Wages:
Sticky wages is an economic concept that defines that the wages of laborers tend to be fixed sometimes and so not change with the economic conditions. The wages are inflexible sometimes and do not change from their equilibrium level.
Answer and Explanation: 1
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View this answerOption (a) do not respond to price level changes is correct.
This is a correct option because the wages are set for the longer duration according to...
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Sticky Wages and Prices: Effect on Equilibrium
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Chapter 7 / Lesson 9
20K
Understand what sticky wages and sticky prices are. Comprehend wage rigidity. Discover why sticky wages and prices are important in Keynesian decision-making.
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