Refer to the Following Figure When Answering the Following Questions

Multiple Choice

Refer to the following figure when answering the following questions.
Figure 7.4: Labor Market
-Consider the labor market depicted in Figure 7.4. The wage, fixed at , is called ________ and ________.

A) a wage rigidity; reduces unemployment
B) a wage rigidity; decreases labor market volatility
C) a flexible wage; increases labor market volatility
D) a wage rigidity; increases labor market volatility
E) the market wage; increases unemployment