Multiple Choice
To study macroeconomics, one needs various models with different assumptions about the flexibility and/or stickiness of price levels.This is because:
A) the economy behaves similarly to demand shocks regardless of the length of time.
B) the price flexibility is a short-run phenomenon while, the price stickiness is a long-run phenomenon.
C) the economy behaves so differently depending on how much time has passed after a demand shock.
D) various government policies are useless to eliminate the effects of an unexpected demand shock.
Correct Answer:
Verified
Correct Answer:
Verified
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