The argument that the nominal wage is fixed because of long-term labour contracts is made by A. proponents of Keynesian sticky wage models, and is generally not questioned by critics of those models. B. proponents of menu cost models, but critics argue that these models do not take explicit account of the reasons that firms and workers write such contracts.

The argument that the nominal wage is fixed because of long-term labour contracts is made by A. proponents of Keynesian sticky wage models, and is generally not questioned by critics of those models. B. proponents of menu cost models, but critics argue that these models do not take explicit account of the reasons that firms and workers write such contracts.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter10: Aggregate Supply

Section: Chapter Questions

Problem 1.1P

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