_____16. According to Keynes’ theory on the rigidity of money wages an employer
ID: 2495548 • Letter: #
Question
_____16. According to Keynes’ theory on the rigidity of money wages an employer during periods of falling output and profits would?
cut the level of money wages rather than the length of the work week.
continue to operate at a loss until economic conditions improve.
wait for voluntary layoffs among the workforce.
All of the above.
None of the above.
_____17. According to Keynesian Theory what factor will ultimately determine the level of employment?
income of the employer.
total output of the economy.
total real wage level.
interest rates on investment.
aggregate demand of the economy.
_____18. Unlike classical theory that believed labor supply was fixed, Keynesians believe that amount of labor supply depends on the current money wage and the expectations about the aggregate:
income level.
price level.
demand level.
supply level.
output level.
_____19. The declining marginal product of labor and the increasing upward pressure on money wages as output and employment increase explain why the Keynesian aggregate supply schedule is:
downward sloping.
horizontal.
vertical.
fixed.
upward sloping.
_____20. Hicks’ theory on compensation tests would be most similar to:
cost-benefit analysis.
input-output analysis.
supply-demand analysis.
marginal utility analysis.
division of labor analysis.
Explanation / Answer
16)
According to Keynes’ theory on the rigidity of money wages an employer during periods of falling output and profits would
None of the above
An employer does not necessarily cut wages , the growth of wage rate becomes slow.
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