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 82 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
Gracias!


bdobbins

  • Member
  • Posts: 326
Reply 3 on: Yesterday
Wow, this really help

 

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

Certain chemicals, after ingestion, can be converted by the body into cyanide. Most of these chemicals have been removed from the market, but some old nail polish remover, solvents, and plastics manufacturing solutions can contain these substances.

Did you know?

In the United States, an estimated 50 million unnecessary antibiotics are prescribed for viral respiratory infections.

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?

The top 10 most important tips that will help you grow old gracefully include (1) quit smoking, (2) keep your weight down, (3) take supplements, (4) skip a meal each day or fast 1 day per week, (5) get a pet, (6) get medical help for chronic pain, (7) walk regularly, (8) reduce arguments, (9) put live plants in your living space, and (10) do some weight training.

For a complete list of videos, visit our video library