Keynesian economists oppose wage cutting when unemployment rises because:
A) They believe it would be unfair to workers
B) Wage cutting reduces workers' income which will cause a decline in spending and unemployment
C) Wage cutting will decrease profits and reduce investment incentives
D) All of the above
Correct Answer:
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Q18: According to Keynes, people are unemployed because
A)
Q19: Keynes stressed the importance of effective demand
Q20: Conservatives and Keynesians differ on the appropriate
Q21: If the objective of government policy during
Q22: If every business in the economy cuts
Q24: Aggregate Demand and Aggregate Supply
A) Explain why
Q25: Aggregate demand is defined as
A) the total
Q26: Aggregate supply is defined as
A) the total
Q27: The Keynesian cross diagram shows
A) the relationship
Q28: Diagram 6a
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