The Reason for Disequilibrium in the Short Run in the Keynesian

question 18

Multiple Choice

The reason for disequilibrium in the short run in the Keynesian model of nominal-wage rigidity is

• A)employers and employees do not know about the actual relative prices.
• B)the contracts according which wages are set for a specific period and can be negotiated only when the contract term ends.
• C)unions which supports fixed wages during the contracts.
• D)that prices and wages move together in the long run.

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