Which One of the Following Describes Keynesians' Rationale for the Positively

question 49

Multiple Choice

Which one of the following describes Keynesians' rationale for the positively sloped SRAS?

• A) Nominal wages are fixed for the term of labour contracts, but price level changes, leading to a change in real wages and output.
• B) Demand for labour increases as prices and therefore profits increase.
• C) Workers prefer longer term contracts because of job security.
• D) There is misperception about the relative price levels.

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Definitions:

Standard Deviation

An indicator of the extent of variability or spread within a collection of numbers, illustrating the degree to which these numbers diverge from one another in a dataset.

Normal Curve

A bell-shaped curve that represents the distribution of a set of data that is symmetrically distributed around the mean.

Binomial Random Variable

A random variable that follows a binomial distribution, representing the number of successes in a fixed number of binary experiments.

Standard Error

A statistic that measures the accuracy with which a sample distribution represents a population by using standard deviation and sample size.