Labor adjustment costs tend to amplify business cycles because:
A) assets are typically worth more in booms than in recessions.
B) the returns to work are higher in booms than in recessions,so people work more during booms and less during recessions.
C) the returns to investment are higher when others are investing as well;thus we see more investment during booms and less during recessions.
D) the uncertainty of recessions tends to increase people's job search time,while greater certainty decreases search time during booms.
Correct Answer:
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