The reluctance to change the relative relationships between wage rates is called a
A)coordination failure.
B)real rigidity.
C)menu cost.
D)macroeconomic externality.

Question

Quizplus · Accepted Answer

Real rigidity refers to the resistance of wage rates to change relative to each other, even if market conditions would suggest otherwise. This can lead to unemployment and other negative economic effects. Coordination failure, menu costs, and macroeconomic externalities are concepts that are related to but distinct from real rigidity.

The Reluctance to Change the Relative Relationships Between Wage Rates