Question

Regarding wage and price stickiness, the coordination argument a. refers tothe synchronization of wages and prices in a market economy through government price setting mechanisms.b there being a market‑wide, systematic way of implementing an acceptable wage cut for all workers or price cut to market participants during a recession.c. the synchronization of wages and prices through the supply and demand of final goods and services in a market economy during a recession.d. there not being a market‑wide, systematic way of implementing an acceptable wage cut for all workers or price cut to market participants during a recession.

Answer 1

Answer:

The correct answer is letter "B": there being a market‑wide, systematic way of implementing an acceptable wage cut for all workers or price cut to market participants during a recession.

Explanation:

Price stickiness refers to the resistance of a price level to change in front of major changes in the overall economy that indicates the current price level is not optimal. The concept can be applied to wages moreover when there is a deficit in a company or a recession in a country that suggests wages should be lower but they maintain their same level.  

Thus, the coordination argument states that the broad market situation should match the price level of goods and services.