Within the Keynesian model with both a flexible price and flexible money wage, illustrate graphically and explain the effect of a decline in expectations. Include in your answer the effects of this policy shift on real output, the price level, employment, the money wage, and the interest rate. Explain what this question has to do with the typical Keynesian view of what causes recessions.

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Unemployment and Cost of Unemployment

Unemployment is the state of being unemployed, even when an individual is actively seeking work opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed.