The Actual Real Wage Must Be Below the Equilibrium Real

question 13

Multiple Choice

The actual real wage must be below the equilibrium real wage in order to encourage firms to produce at any output level above the natural rate.Once workers realize this situation,their expected price level will gradually rise and they will demand a higher nominal wage.This description of a business cycle adjustment is part of which of the following theories?

• A)Classical model
• B)original Keynesian model
• C)Friedman fooling model
• D)the RBC model

---

Definitions:

Two-word Phrases

Combinations of two words that can convey a concept, instruction, or entity, often used for clarity or emphasis.

Grammar

The collection of structural regulations that dictate how clauses, phrases, and words are assembled in a specific natural language.

Appearance

The way that someone or something looks to others, encompassing aspects of physical presentation, clothing, grooming, and attractiveness.

Conservation

The practice of preserving natural resources and the environment for future generations.