If prices and wages are perfectly flexible, then = 0 and changes in aggregate demand have a

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"If prices and wages are perfectly flexible, then γ= 0 and changes in aggregate demand have a smaller effect on output." Is this statement true, false, or uncertain? Explain your answer.

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The Economics of Money Banking and Financial Markets

ISBN: 978-0133836790

11th edition

Authors: Frederic S. Mishkin

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Question Posted: Nov 03, 2017 04:08 AM

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If prices and wages are perfectly flexible, then = 0 and changes in aggregate demand have a

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False As prices and wages become more flexible becomes larger ...View the full answer

The Economics of Money Banking and Financial Markets

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