In the Keynesian model,wages and prices are
A)sticky in the short run,but flexible in the long run.
B)sticky in the long run,but flexible in the short run.
C)forecast accurately by both employees and employers.
D)flexible in the short run and the long run.

Question

Quizplus · Accepted Answer

In the Keynesian model, wages and prices are seen as sticky, meaning they do not adjust easily in the short run to changes in supply and demand. However, in the long run, they are more flexible and can adjust to changes in the economy. This is because in the short run, employers may be hesitant to change wages and prices due to concerns about worker morale and customer reactions, but in the long run, they may have more freedom to adjust as economic conditions change.

In the Keynesian Model,wages and Prices Are