Multiple Choice
In the model with Keynesian sticky wages and prices
A) The first welfare theorem holds.
B) The marginal product of labour may not be equal to the marginal rate of substitution of leisure for consumption.
C) Supply equals demand in every market.
D) The representative firm is not optimizing.
E) The representative consumer is choosing labour supply optimally given the market real wage.
Correct Answer:
Verified
Correct Answer:
Verified
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