One of the Major Weaknesses of the Original Keynesian Approach

question 80

Multiple Choice

One of the major weaknesses of the original Keynesian approach to the business cycle was

• A)the assumption that firms were perfectly competitive.
• B)the failure to explain why wages were rigid.
• C)the denial of the existence of the Pigou effect.
• D)the assumption that the demand for labor depended on the real wage.

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