Which of the Following Is an Important Assumption About the Labor

question 35

Multiple Choice

Which of the following is an important assumption about the labor market that is shared by both the original Keynesian model and the Friedman "Fooling Model?"

• A)The supply of labor depends on expected real wages.
• B)The demand for labor is a function of nominal wages.
• C)Workers can be "off" their labor supply function in the short-run equilibrium.
• D)Firms can be "off" their labor demand function in the short-run equilibrium.

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