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In the Keynesian Model,the Economy Can Be Off the FE

Question 56

Multiple Choice

In the Keynesian model,the economy can be off the FE line and the LRAS curve in the short run because


A) the interest rate is slow to adjust.
B) the unemployment rate is high during recession.
C) the actual price level differs from what was expected when nominal wage contracts were signed.
D) real wage is sticky in short run.

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