According to Keynesian Theory

Multiple Choice

According to Keynesian theory,

A) sticky prices and wages do not have an effect on aggregate expenditures.
B) because of sticky prices and wages, changes in total spending have the biggest impact on output and employment.
C) wage and price stickiness cause output and employment to remain close to their full employment levels, even when total spending changes.
D) wages and prices fall in the early stages of a recession even when total spending is declining.