Suppose that demand for a product falls, but prices are sticky. What is likely to happen to prices and output in that market, in the short run?
What will be an ideal response?
If prices are not flexible, they may not immediately adjust downward in response to the decrease in demand. So in the short run, prices may stay constant, and output might fall by more than would have happened if prices were flexible.
Economics
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Last year in a small economy, consumption spending was $12,000, investment spending was $3,500, government spending was $4, 000, exports were $1,150, and imports were $1,350. What was GDP for this economy last year?
What will be an ideal response?
Economics
What is the relationship between wants, factors of production, scarcity, and choices? Discuss the relationship for an individual and for a society
What will be an ideal response?
Economics