As wages and prices become more sticky ________.
A)inflation becomes more responsive to unemployment deviations from the natural rate
B)wages become less responsive to unemployment deviations from the natural rate
C)it becomes more difficult to differentiate the short-run from the long-run Phillips curve
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

Sticky wages mean that wages do not adjust quickly to changes in unemployment, making them less responsive to deviations from the natural rate.

As Wages and Prices Become More Sticky ________