Chapter 8 - The Phillips Curve, the Natural Rate of Unemployment, and Inflation Flashcards
1
Q
Factors for Labor- market rigidities
A
a) a generous system on unemployment insurance
b) a high degree of employment protection
c) minimum wages
d) bargaining rules, such as extension agreements
2
Q
wage indexation
A
wage indexation is a provision that automatically increases wages in line with inflation
3
Q
Can more frequent wage adjustments preserve higher levels of real wages?
A
no, just possible to set up higher inflation
