The Keynesian view regards the longrun as being typically a substantial period of time because:
A) market participants form rational expectations
B) wages are flexible
C) wages are negotiated for periods of one year or more
D) imbalances in the labour market clear very quickly

Question

Quizplus · Accepted Answer

Keynesians believe that wages are often set for longer periods, such as a year or more, due to contracts and negotiations, which makes the adjustment process in the labor market slower and extends the long-run period.

The Keynesian View Regards the Longrun as Being Typically a Substantial