A price may be sticky because
A) of monetary policy.
B) of menu costs.
C) of total factor productivity shocks.
D) of the monetary illusion.
B
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Factory A can reduce emissions at a cost of $250 per ton. Factory B can reduce emissions at a cost of $400 per ton. In a system in which the government issues transferable pollution right at a price of $200 per ton:
a. Factory A can profit from selling its pollution rights to Factory B. b. Both firms have an incentive to buy pollution rights c. Factory B can profit from selling its pollution rights to Factory A. d. Both firms have an incentive to sell pollution rights.
A decrease in long-run aggregate supply increases the value of real GDP at the natural rate of unemployment for all price levels
a. True b. False Indicate whether the statement is true or false