In the Keynesian model with a variable money wage and variable price level,an increase in the money supply lead to a rise in all of the following except
A)price level.
B)output.
C)real wage.
D)level of employment.
E)all of these rise

Question

Quizplus · Accepted Answer

In the Keynesian model with a variable money wage and variable price level, an increase in the money supply leads to an increase in output, the level of employment, and the price level. However, the real wage, which is the nominal wage adjusted for inflation, will not necessarily increase. In fact, with an increase in the money supply, there may be upward pressure on prices, which may then offset any increase in the nominal wage, resulting in a decrease in the real wage.

In the Keynesian Model with a Variable Money Wage and Variable