This topic contains a solution. Click here to go to the answer

Author Question: How is a firm's labor demand affected during a recession if wages are downwardly rigid? What will ... (Read 85 times)

xclash

  • Hero Member
  • *****
  • Posts: 681
How is a firm's labor demand affected during a recession if wages are downwardly rigid?
 
  What will be an ideal response?

Question 2

A change in the reserve requirement is used infrequently by the Fed because it
 
  A) does not affect bank reserves. B) does not influence the money supply.
  C) is disruptive to the banking system. D) does not affect the money multiplier.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Ahernandez18

  • Sr. Member
  • ****
  • Posts: 361
Answer to Question 1

The labor demand curve shifts to the left during a recession. With flexible wages, this leads to a fall in equilibrium wage and employment. However, if wages are downwardly rigid, firms are unable or unwilling to cut wages because of contractual restrictions or because of morale problems that would result from falling wages. As a result, they end up laying off more workers than they would have otherwise. With downwardly rigid wages, a leftward shift in the labor demand curve causes employment to fall by even more than it would if wages are flexible.

Answer to Question 2

C




xclash

  • Member
  • Posts: 681
Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review


nyrave

  • Member
  • Posts: 344
Reply 3 on: Yesterday
Excellent

 

Did you know?

The training of an anesthesiologist typically requires four years of college, 4 years of medical school, 1 year of internship, and 3 years of residency.

Did you know?

Looking at the sun may not only cause headache and distort your vision temporarily, but it can also cause permanent eye damage. Any exposure to sunlight adds to the cumulative effects of ultraviolet (UV) radiation on your eyes. UV exposure has been linked to eye disorders such as macular degeneration, solar retinitis, and corneal dystrophies.

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

A strange skin disease referred to as Morgellons has occurred in the southern United States and in California. Symptoms include slowly healing sores, joint pain, persistent fatigue, and a sensation of things crawling through the skin. Another symptom is strange-looking, threadlike extrusions coming out of the skin.

Did you know?

Colchicine is a highly poisonous alkaloid originally extracted from a type of saffron plant that is used mainly to treat gout.

For a complete list of videos, visit our video library