Countries in which wages adjust slowly to changes in the supply of and demand for labour are likely to have ________ sacrifice ratio.
A)an infinite
B)a high
C)a low
D)a zero

Question

Quizplus · Accepted Answer

A sacrifice ratio is the amount of output a country must forgo to bring down inflation by 1%. In countries where wages adjust slowly to changes in supply and demand for labor, it takes longer for the labor market to respond to changes in inflation, resulting in a high sacrifice ratio.

Countries in Which Wages Adjust Slowly to Changes in the Supply