In order for the Keynesian DMP model to be consistent with Keynesian ideas,the high wage equilibrium needs to have
A) high unemployment and low output.
B) low unemployment and high vacancies.
C) high unemployment and high output.
D) low unemployment and high output.
E) low vacancies and high output.

Question

Quizplus · Accepted Answer

The Keynesian DMP model, consistent with Keynesian ideas, suggests that high wages can lead to high unemployment and low output due to decreased demand for labor and reduced economic activity.

In Order for the Keynesian DMP Model to Be Consistent