Which of the following explains why the Fed is able to have a dramatic effect on aggregate demand and real output in the short run?
A. price confusion that speeds up the adjustment of real GDP
B. money illusion that speeds up the adjustment of the price level
C. sticky prices that slow the adjustment of the price level
D. sticky wages that slow the adjustment of real GDP
Answer: C. sticky prices that slow the adjustment of the price level
Economics
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In a modern mixed economy, who decides what goods and services will be produced?
A) only the producers B) only the government C) only consumers D) all of the above
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In perfect price discrimination, consumer surplus is zero because each consumer pays: a. the market price
b. the cost price. c. peak load price. d. the reservation price
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