The Keynesian AS-Curve Differs from the Classical AS-Curve, Since Keynes

question 25

Multiple Choice

The Keynesian AS-curve differs from the classical AS-curve, since Keynes

• A)thought that labor markets worked smoothly to always establish full employment
• B) thought that nominal wages were rigid even when there was unemployment
• C) thought that nominal wages were flexible even when there was unemployment
• D)described the AS-curve as completely vertical
• E)assumed that firms tried to exploit the work force by paying them substandard wages

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Definitions:

Spot Exchange Rate

The existing rate for the instant exchange of one currency for another.

Correlation

A numerical indicator that demonstrates how two variables move in relation to each other, showing both the intensity and the orientation of their link.

Indices

Market indicators or benchmarks that track the performance of a specific basket of assets or group of stocks, representing a specific sector, market, or economy.

DJIA

The Dow Jones Industrial Average, a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.