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The existence of sticky wages suggests that some unemployment is caused by workers or firms unwillingness to negotiate wage

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Answer - wages will be constant over the business cycle

According to the theory of sticky wages, wages change very slowly and have a slow response to changes in performance of a company.

If the demand for a product decreases, the market price of the product also decreases in order to maintain equilibrium between demand and supply. So in labor market, we can assume that during recession or when the company is not doing well, the wages of employees can decrease. But some researchers have found that it is very unlikely that wages will ever decrease. Wages might not even decrease in the worst recessions. So this is the theory of Sticky wages, and the upward movement of wage is also very slow so, we can say that wages will be constant over the business cycle.

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