Why is persistent unemployment a possibility in the Keynesian model but NOT in the classical model?

A. The Keynesian model assumes that nominal wages are inflexible downward.
B. The Keynesian model assumes that people work for motives other than those of earning an income for themselves and supporting a family.
C. The Keynesian model assumes that workers can lose their jobs to foreign competition during economic downturns.
D. The Keynesian model assumes that the level of real GDP is inflexible.


Answer: A

Economics

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