The unemployment problem becomes more severe if prices are sticky downward.

Name: The unemployment problem becomes more severe if prices are sticky downward.
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Question

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If prices are sticky downward, it means that they cannot easily be reduced in response to decreased demand. This leads to a decrease in sales and revenue for firms, which can lead to a decrease in production and an increase in unemployment. Therefore, the unemployment problem becomes more severe when prices are sticky downward.

The Unemployment Problem Becomes More Severe If Prices Are Sticky