Answer to Question #187957 in Macroeconomics for phume

Question

According to Tobin (1993), examples of Keynesian unemployment include situations where

Answer 1

According to Tobin (1993) Keynesian unemployment is a phenomenon of monetary economy, and required understanding of the monetary system and financial assets. Thus, included situations where

1) It resulted from long lasting phenomenon disequilibrium dynamics.

2) Futility of wage and price reduction that left employers with no incentives to hire more labour.

3) An excess supply of labour in a non clearing labour market.

4) Lack of expenditures within an economy that decreases aggregate demand.

5) Continuous decrease in spending du4ing a recession resulting in further decrease in demand.

6) Inertia in nominal wage and price paths.