The keynesian model argues that prices are sticky. one reason supporting this argument is thata. nominal wages are flexible but real wages are not. b. government price ceilings. c. all unemployment is voluntary. d. nominal wages are inflexible downwards.
since the nominal wage is deemed inflexible, a decrease in aggregate demand causes firms toa. increase wages to increase income so ad increases. b. lower the real wage. c. simply have all workers produce at a slower rate without any unemployment. d. reduce their workforce.
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