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:

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Gu Kaizhi

A celebrated Chinese painter and poet of the Jin Dynasty, often considered the founder of classical Chinese landscape painting, known for works like "The Admonitions Scroll."

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Confucius

An influential Chinese philosopher and social thinker, living in the 5th century BCE, whose teachings focus on ethics, morality, and social relationships.