The short-run relationship between the rate of change in the wage level and the level of unemployment is generally
A) positive.
B) inverse.
C) nonexistent.
D) reflexive.
E) inert.

Question

Quizplus · Accepted Answer

The short-run relationship between the rate of change in the wage level and the level of unemployment is generally inverse. When wages go up, firms may hire fewer workers or decrease production, leading to higher levels of unemployment. When wages go down, firms may hire more workers or increase production, leading to lower levels of unemployment.

The Short-Run Relationship Between the Rate of Change in the Wage