Multiple Choice
Which of the following correctly describes a theory of wage behavior during the business cycle?
A) Real Business Cycle theory holds that workers are relatively unresponsive to wage changes
B) Classical theory holds that nominal wages are inflexible
C) Keynesian theory holds that real wages may rise during recessions, preventing labor markets from clearing
D) Rational expectations theory holds that workers continue to anticipate wage increases during recessions
E) Marxist theory holds that unions cause recessions by keeping wages too high
Correct Answer:
Verified
Correct Answer:
Verified
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