The staggering of wages and prices All wages and prices do not adjust at the same time. This staggering of wage price adjustment causes the overall price level to move slowly in response to demand changes. Each firm and worker knows that when it reduces its nominal price,its relative price will be low for a time.This makes them reluctant to reduce their price.• The staggering of wages and prices • All wages and prices do not adjust at the same time. • This staggering of wage & price adjustment causes the overall price level to move slowly in response to demand changes. • Each firm and worker knows that when it reduces its nominal price, its relative price will be low for a time. This makes them reluctant to reduce their price