The simple Keynesian model assumes that

A) gross private domestic investment exceeds net investment by the capital consumption allowance.
B) prices, especially the price of wages, are "sticky downward."
C) there will never be any excess capacity in the short run.
D) aggregate demand will always equal aggregate supply.


B

Economics

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When prices fall and the cash balances that you hold in your wallet are worth more allowing you to purchase more with your money, then this explains why the aggregate demand curve is downward sloping. The effect that describes this phenomena is the:

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