Multiple Choice
Each of the two models of short-run aggregate supply is based on some market imperfection. In the sticky-price model, the imperfection is that:
A) some firms do not adjust their prices instantly to changes in demand.
B) expectations are formed adaptively rather than rationally.
C) firms confuse changes in the overall level of prices with changes in relative prices.
D) the real wage adjusts to bring labor supply and labor demand into equilibrium.
Correct Answer:
Verified
Correct Answer:
Verified
Q8: An economy must sacrifice 12 percent of
Q9: According to the sticky-price model, output will
Q10: Assume that the sacrifice ratio for an
Q11: The Phillips curve analysis described in Chapter
Q12: According to the sticky-price model, other things
Q14: Along an aggregate supply curve, if the
Q15: In the case of cost-push inflation, other
Q16: According to the natural-rate hypothesis, output will
Q17: All of the following are exogenous variables
Q18: How is hysteresis related to recession? Explain.