Countries in which wages adjust slowly to changes in the supply of and demand for labor are likely to have ________ sacrifice ratio.
A)an infinite
B)a high
C)a low
D)a zero

Question

Quizplus · Accepted Answer

A high sacrifice ratio indicates that a large output loss is required to achieve a small reduction in inflation. In countries where wages adjust slowly, it takes longer for the labor market to adjust to changes in supply and demand, leading to higher unemployment and a larger output loss in order to reach a lower level of inflation.

Countries in Which Wages Adjust Slowly to Changes in the Supply