An Important New Keynesian Explanation for the Existence of Involuntary

question 6

Multiple Choice

An important New Keynesian explanation for the existence of involuntary unemployment is that labour markets exhibit

• A)perfectly flexible wages.
• B)unshifting labour demand.
• C)rigid or sticky wages.
• D)an elastic labour demand curve.
• E)unshifting labour supply.

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Definitions:

Quarterly Return

The financial return or profit generated by an investment over a three-month period.

Investment

Commitment of current resources in the expectation of deriving greater resources in the future.

Effective Annual Rate

The interest rate on an investment or loan which accounts for the effect of compounding over a given period.

Semi-annually Return

The rate of return on an investment calculated by compounding interest twice a year.