The experience of many economies suggests that
A)upward pressures on wages are largely ineffective in booms.
B)downward pressure on wages during slumps is not as intense as upward pressure on wages during booms.
C)slumps and booms are not common; the economy is usually in equilibrium at potential output.
D)unit labour costs fall quickly during booms.
E)downward pressure on wages during slumps results in sharply increased labour costs.

Question

Quizplus · Accepted Answer

Many economies have experienced that during slumps, there is not as intense pressure on wages to fall as there is during booms to increase. This may be due to factors such as minimum wage laws or the difficulty of convincing employees to accept lower wages even during tough economic times.

The Experience of Many Economies Suggests That