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Consider the AD/AS Macro Model

Question 4

Multiple Choice

Consider the AD/AS macro model.Why do we say that the wage-adjustment process is asymmetrical?


A) Because factor prices fluctuate more frequently than goods prices.
B) Because goods prices rise more quickly than factor prices.
C) Because employers delay wage increases in a boom but lay off workers quickly during a slump.
D) Because taxes rise quickly in a boom but do not fall during a slump.
E) Because wages rise quickly in a boom but fall slowly during a slump.

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