Which of the following statements is false?
A) Keynes believed that the level of investment depends on more than just the interest rate.
B) Saving is the difference between disposable income and consumption.
C) Keynes believed that saving is more responsive to changes in income than to changes in the interest rate.
D) According to Keynes,wage rates may fall too quickly when the economy is in a recessionary gap.

Question

Quizplus · Accepted Answer

Keynes actually argued that wages are sticky downwards, meaning they do not fall quickly in response to a recessionary gap. This stickiness can contribute to prolonged unemployment during economic downturns.

Which of the Following Statements Is False