Problem
1. (Output Gaps and Wage Flexibility)What are some reasons why nominal wages may not fall during a contractionary gap?
2. (Case Study: U.S. Output Gaps and Wage Flexibility) Unemployment is costly to employers, employees, and the economy as a whole. What are some explanations for the coordination failures that prevent workers and employers from reaching agreements?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.