Refer to the following figure when answering
Figure 15.2: The Labor Market
-In the stylized DSGE model for the labor market displayed in Figure 15.2, the line marked $\bar W$ is due to which of the following?
i. Cyclical unemployment
ii. Sticky prices
iii. Sticky wages
A) iii
B) i and ii
C) ii
D) i
E) ii and iii

Question

Refer to the following figure when answering  
Figure 15.2: The Labor Market 
-In the stylized DSGE model for the labor market displayed in Figure 15.2, the line marked $\bar W$ is due to which of the following?
i. Cyclical unemployment
ii. Sticky prices
iii. Sticky wages
A) iii 
B) i and ii 
C) ii 
D) i 
E) ii and iii

Quizplus · Accepted Answer

The line marked $\bar W$ in a DSGE model typically represents the concept of sticky wages, which means that wages do not adjust immediately to changes in economic conditions, leading to wage rigidity.

Refer to the Following Figure When Answering Figure Wˉ\bar WWˉ

Refer to the Following Figure When Answering
Figure $\bar W$