« previous next »

Author Question: Discuss some of the reasons behind downward stickiness of wages and ... (Read 13 times)

rayancarla1

  • Hero Member
  • *****
  • Posts: 571
on: Jun 30, 2018
Discuss some of the reasons behind downward stickiness of wages and prices.

Question 2

If all U.S. government bonds are held by U.S. citizens, then:
 a. the bondholders will not earn interest on the bonds.
  b. there is no tax liability for funding the U.S. government's debt.
  c. there is no net change in national wealth when the national debt changes.
  d. the tax liability for funding the debt is not offset by the interest earnings of bondholders.
  e. the tax rates are not increased to repay the outstanding debts.


peter

  • Sr. Member
  • ****
  • Posts: 330
Reply #1 on: Jun 30, 2018
Answer to Question 1

Empirical evidence supports several explanations for the downward stickiness of wages and prices. Firms may not be able to legally cut wages because of long-term labor contracts or a legal minimum wage. Efficiency wages may also limit a firm's ability to lower wage rates. Menu costs may cause price inflexibility as well.

Answer to Question 2

c


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Many medications that are used to treat infertility are injected subcutaneously. This is easy to do using the anterior abdomen as the site of injection but avoiding the area directly around the belly button.

Did you know?

The average adult has about 21 square feet of skin.

Did you know?

Signs and symptoms that may signify an eye tumor include general blurred vision, bulging eye(s), double vision, a sensation of a foreign body in the eye(s), iris defects, limited ability to move the eyelid(s), limited ability to move the eye(s), pain or discomfort in or around the eyes or eyelids, red or pink eyes, white or cloud spots on the eye(s), colored spots on the eyelid(s), swelling around the eyes, swollen eyelid(s), and general vision loss.

Did you know?

Approximately one in four people diagnosed with diabetes will develop foot problems. Of these, about one-third will require lower extremity amputation.

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

Over nearly 30 years, humans removed many polar bears for a variety of reasons, from a population in Over nearly 30 years, humans removed many polar bears for a variety of reasons, from a population in
A biological profile from the bony remains of an individual may be preferable to a DNA profile for a A biological profile from the bony remains of an individual may be preferable to a DNA profile for a
The “Infertility Belt” In certain countries in Central Africa, infertility rates are as high as 30% The “Infertility Belt” In certain countries in Central Africa, infertility rates are as high as 30%
Dolores Huerta and Cesar Chavez, leaders of the United Farm Workers, discuss their 1968 strike of ... Dolores Huerta and Cesar Chavez, leaders of the United Farm Workers, discuss their 1968 strike of ...
Ratio of College Wages to High-School Wages Ratio of College Wages to High-School Wages
Share of Human Capital in Wages in Developing Countries Share of Human Capital in Wages in Developing Countries
Video: Pasteur's Experiment

For a complete list of videos, visit our video library