Prices help coordinate all phases of production so producers have the right quantities of resources they need, in the right place, to operate

Efficiency wage theory provides a reason for uncontracted nominal wages to ________ when nominal aggregate demand falls, thus ________ a recession

A) fall proportionately, leading to B) fall proportionately, preventing C) remain unchanged, leading to D) remain unchanged, preventing

Suppose that most government spending was on capital goods that contribute to economic growth. How would that affect the Ricardian equivalence debate?

What will be an ideal response?