Principles of Macroeconomics (12th Edition)
12th Edition
ISBN: 9780134078809
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 13, Problem 4.4P
To determine
Impact of social and implicit contracts on sticky wages.
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What are the causes of inflexible or sticky wages
Karl Marx argued that an 'Industrial Reserve Army of the Unemployed' would be produced by capitalism and would serve as a check on wages. In his argumentation, how does capitalism produce unemployment? How does this affect wages? How do capitalists benefit from unemployment? How might unemployment hurt capitalists?
Give two reasons why a firm might want to pay workers above the competitive wage and how can this lead to unemployment?
Chapter 13 Solutions
Principles of Macroeconomics (12th Edition)
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- As the baby boomer generation retires, what should happen to wages and employment? Can you show this graphically?arrow_forwardA government passes a family-friendly law that no companies can have evening, nighttime, or weekend hours, so that everyone can be home with their families during these times. Analyze the effect of this law using a demand and supply diagram for the labor market: first assuming that wages are flexible, and then assuming that wages are sticky downward.arrow_forwardExplain how the changes in wages can affect equilibrium.arrow_forward
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