In the Keynesian Model with Efficiency Wages

question 15

Multiple Choice

In the Keynesian model with efficiency wages

• A)the full-employment line is determined where the quantity of labor demanded equals the quantity of labor supplied.
• B)the full-employment level is determined at the intersection of the labor demand curve and the efficiency wage line.
• C)an increase in labor supply increases employment.
• D)a decrease in labor supply shifts the FE line to the left.

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