According to Keynes, money wages
a. would adjust in the short run in order to maintain full-employment.
b. are inflexible in the short run are cannot guarantee full-employment levels of output.
c. are inflexible and fall as the price level rises.
d. are more flexible downward than upward direction.
B
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If a nation does not have an absolute advantage in producing anything, it
a. has no comparative advantage either. b. will have a comparative advantage in the activity in which it is least inefficient. c. will try to get along without trade. d. will export raw materials and import finished products.
Which of the following will most likely occur during the contractionary phase of a business cycle?
a. Real GDP rises, and the unemployment rate falls. b. Real GDP declines, and the rate of inflation rises. c. The sales of most businesses decline, and the unemployment rate rises. d. Inflation rises, and employment/population ratio falls.