We don't typically see wages fall in response to an economic downturn because: Multiple Choice they are "sticky" and are slow to respond to shifts in the economy. labor supply adjusts so that the market stays at the original equilibrium wage level. the government sets tight regulations on how firms compensate their employees. there is often little change in the labor market in response to economic conditions. Wage stickiness in an economic downturn can result in: Multiple Choice a surplus of labor. a shortage of labor. actual wages that are temporarily above the market-clearing level. cyclical unemployment

We don't typically see wages fall in response to an economic downturn because: Multiple Choice they are "sticky" and are slow to respond to shifts in the economy. labor supply adjusts so that the market stays at the original equilibrium wage level. the government sets tight regulations on how firms compensate their employees. there is often little change in the labor market in response to economic conditions. Wage stickiness in an economic downturn can result in: Multiple Choice a surplus of labor. a shortage of labor. actual wages that are temporarily above the market-clearing level. cyclical unemployment

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter7: Inflation

Section: Chapter Questions

Problem 1SQP

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