Multiple Choice
With sticky prices, in the stylized DSGE model, firms ________ and labor demand is ________.
A) agree to produce what is demanded; vertical
B) must update their expectations; equal to the marginal product of labor
C) use adaptive expectations; horizontal
D) produce at the natural rate of output; downward sloping
E) supply at marginal cost; perfectly competitive
Correct Answer:
Verified
Correct Answer:
Verified
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