This paper reveals that the hypothesis of fully flexible prices and wages is insufficient to guarantee that the effect of a decrease in the autonomous demand could be eliminated. In other words, the return to the original equilibrium would never take place. A Keynesian model is elaborated to demonstrate that a decrease in demand induces another decrease in demand and thus increases recession. The findings indicate that the original equilibrium could be restored, for instance, by way of an increase of government expenditures which would be able to change the expectational state of economy, starting a process of recovery.
