Which One of the Following Describes Keynesians' Rationale for the Positively

question 72

Multiple Choice

Which one of the following describes Keynesians' rationale for the positively sloped SRAS curve?

• A)Nominal wages are fixed for the term of labour contracts,but price level changes,leading to a change in real wages and output.
• B)Demand for labour increases as prices increase and therefore profits increase.
• C)Workers prefer longer term contracts because of job security.
• D)There is misperception about the relative price levels.

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Definitions:

Going-concern Assumption

An accounting principle that assumes a business will continue to operate indefinitely, rather than being liquidated.

Financial Statements

Standardized documents that provide an overview of a company's financial performance and position, including the balance sheet, income statement, and cash flow statement.

Operating

Pertains to the regular, ongoing activities of a business that are involved in the production or sale of goods and services.

GAAP

Generally Accepted Accounting Principles; a framework of accounting standards, rules and procedures defined by the professional accounting industry, used to compile financial statements.