"If there is unemployment,the average wage rate will decline as the unemployed workers choose lower wages rather than going without a job.The demand curve for labor slopes downward and to the right so that more workers would be hired at the lower wage rate,restoring full employment." According to the Keynesian view,this quote is
A) incorrect because widespread unemployment would cause wages to rise,not decline.
B) incorrect because the demand for labor,other things constant,will not be negatively related to wages.
C) incorrect because wages and prices tend to be highly inflexible downward.
D) essentially correct.
Correct Answer:
Verified
Q63: Long lags make discretionary policy less effective
Q64: If an economy is experiencing both full
Q65: Because of automatic stabilizers, government budget deficits
Q70: The distinction between discretionary fiscal policy and
Q72: Discretionary fiscal policy involves
A) expansion of government
Q77: The major advantage of automatic stabilizers is
Q82: Use the figure below to answer the
Q86: If consumption equals 800 when disposable income
Q92: What happens in the economy illustrated in
Q98: Use the figure below to answer the
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents