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Keynesians think that wages and prices adjust​ _____ when the economy is out of equilibrium. If the Keynesian theory is​ correct, unemployment​ _____.

A. ​slowly; will persist
B. ​rapidly; will not persist
C. ​slowly; will not persist
D. ​rapidly; will persist

User Tinker
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Final answer:

Keynesians believe that wages and prices adjust slowly when the economy is out of equilibrium, resulting in persistent unemployment.

Step-by-step explanation:

The correct answer is A. slowly; will persist.

According to Keynesians, when the economy is out of equilibrium, wages and prices adjust slowly. This is because wages and prices are considered to be sticky, meaning they are resistant to change. As a result, when there is a downturn in the economy, wages and prices do not immediately fall, leading to persistent unemployment. The Keynesian theory suggests that government intervention is necessary to stimulate the economy and reduce unemployment.

User ISeeJay
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