During recessions,workers resist efforts to reduce nominal wages because
A)they believe wage reductions are inefficient
B)they care more about nominal wages than about real wages
C)they worry that they will not qualify for unemployment benefits
D)they would rather be unemployed than accept a lower nominal wage
E)of the difficulty of coordinating wage cuts on a large scale

Question

Quizplus · Accepted Answer

Workers resist efforts to reduce nominal wages during recessions because of the difficulty of coordinating wage cuts on a large scale. It is hard to get all employers to agree to lower wages, and even if they do, it may cause a domino effect of lower prices and reduced demand, which could lead to even more unemployment. Therefore, workers are hesitant to accept lower nominal wages and prefer to maintain their current wage levels.

During Recessions,workers Resist Efforts to Reduce Nominal Wages Because