The key implication for macroeconomic instability is that insider-outsider relationships in the labor market
A)contribute to the downward inflexibility of wages.
B)help reduce the downward inflexibility of wages.
C)increase the velocity of money.
D)reduce the velocity of money.

Question

Quizplus · Accepted Answer

Insider-outsider relationships in the labor market often lead to wage rigidity, as insiders (current employees) have more power to negotiate and maintain higher wages, making it difficult to reduce wages even during economic downturns.

The Key Implication for Macroeconomic Instability Is That Insider-Outsider Relationships