In the long run, nominal wages are:Group of answer choicessticky downward but flexible in an upward direction. sticky upward but flexible in a downward direction. sticky in both an upward and downward direction. flexible because contracts and informal agreements are renegotiated in the long run. flexible because the government adjusts disequilibrium in labor markets in th

Question

Paola Blackburn

Business

31 January, 00:00

In the long run, nominal wages are:Group of answer choicessticky downward but flexible in an upward direction. sticky upward but flexible in a downward direction. sticky in both an upward and downward direction. flexible because contracts and informal agreements are renegotiated in the long run. flexible because the government adjusts disequilibrium in labor markets in th

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Answers (1)

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Wade Charles · Answer 1

sticky in both an upward and downward direction

Explanation:

nominal wages are wages been earned per hour or as agreed between the worker and the employer. it is seen as means of compensating the worker. it is called nominal wage because the effects of deflation (downward direction of prices in the market) and inflation (upward direction of prices in the market) does not affect the Nominal wages of an employee hence it is sticky in both an upward and downward direction of price movement in the market.

unlike the real wages where the factors of inflation and deflation has an effect on it by either decreasing or increasing the purchasing power of the real wage.