The relative-wage explanation for the existence of downwardly sticky wages emphasizes ?
Correct answer: A. 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
- A. 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
- B. employment contracts that stipulate workers' wages usually for a period of one to three years
- C. unspoken agreements between workers and firms that firms will not cut wages
- D. the incentive that firms may have to hold wages above the market clearing rate
Explanation
The relative-wage argument says workers resist a cut if they believe comparable workers elsewhere have not also suffered cuts, because the cut feels unfair. The other choices describe contracts, implicit agreements, or efficiency-wage explanations.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
All the following are types of monetary policy expect ?
The AD schedule indicates that _______ inflation is associated with ________ output?
In the classical model, potential output cannot be increased by ?
When economists use the term real business cycle theory they are suggesting that business cycles are caused by ?
Doubts about the natural and the existences of the Phillips curve arose in the 1970s when the economy experienced ?
If input price prices adjusted very rapidly to output prices as classical economists argue the Philips curve would be ?