Keynes assumed that wages and prices were slow to adjust in order to explain
A) persistently high unemployment.
B) high inflation.
C) the high level of interest rates.
D) why inflation fell in recessions.
A
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The distinguishing feature of a well-functioning financial market is the
A) continual increase in the liquidity of most assets. B) continual reduction in the riskiness of most assets. C) increased ease of converting common stocks into bonds. D) incorporation of available information into asset prices.
When the government provides poor families with antipoverty programs such as welfare, Medicaid, food stamps, and the Earned Income Tax Credit which are all tied to income,
a. the government creates an egalitarian distribution of income. b. the recipients can usually receive benefits for an unlimited amount of time. c. it is common for families to face very high effective marginal tax rates. d. the incentive to work and earn more income remains unchanged.