What did John Maynard Keynes believe about the flexibility of wages and prices?
A) Wages and prices are flexible.
B) Wages are flexible, but prices are NOT.
C) Wages and prices are relatively inflexible.
D) Prices are flexible, but wages are NOT.

Question

What did John Maynard Keynes believe about the flexibility of wages and prices?  
A) Wages and prices are flexible. 
B) Wages are flexible, but prices are NOT. 
C) Wages and prices are relatively inflexible. 
D) Prices are flexible, but wages are NOT.

Quizplus · Accepted Answer

John Maynard Keynes believed that wages and prices were relatively inflexible, particularly in the short term. He argued that in times of economic downturn, prices and wages did not adjust quickly enough to maintain full employment, leading to prolonged periods of unemployment and economic stagnation. Keynes advocated for government intervention to stimulate the economy during downturns, such as through fiscal and monetary policy, to counteract the inflexibility of wages and prices.

What Did John Maynard Keynes Believe About the Flexibility of Wages