Define reason that why wages are not flexible

Reference no: EM132133682

Question: You could write on any one of the following topics or more than one topics. Please be reminded that while research could help for this essay, however, the most important thing is original idea.

1. Money is said to have four functions: a medium of exchange, a unit of accounting, a storage of value and, a standard of deferred payment. Could you think of any other economic function of money?

2. Wages are said to be sticky when they do not adjust fast enough to reflect changing conditions of demand and supply. The common reasons cited are long term contract between firms and workers, union power and, high costs of changing the wage rate. Could you think of any other reason that why wages are not flexible (especially in the downward direction)?

3. It is observed people could be quite inconsistent in their attitude towards risk. For instance, they could be buying insurance to avoid risk and yet gambling at time to enjoy the risk. How do you explain that?

Reference no: EM132133682

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