The sticky-price theory of the short-run aggregate supply curve says that if the price level rises by 5% and people were expecting it to rise by 2%, then firms have
a. higher than desired prices, which leads to an increase in the aggregate quantity of goods and services supplied.
b. higher than desired prices, which leads to a decrease in the aggregate quantity of goods and services supplied.
c. lower than desired prices, which leads to an increase in the aggregate quantity of goods and services supplied.
d. lower than desired prices, which leads to a decrease in the aggregate quantity of goods and services supplied.
c
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Answer the following statement(s) true (T) or false (F)
1. When using a damage function, incremental benefits are measured as a vertical distance of total damages (TD) associated with a decrease in some contaminant (C). 2. The averting expenditure approach is favored by researchers because it can capture both existence and user value. 3. The contingent valuation method is so called because it is contingent upon the hypothetical market that serves as the context for the survey. 4. The benefit estimation method that relies on goods that are complements to environmental quality is the averting expenditure method. 5. A known problem associated with the averting expenditure method is jointness of production, which refers togoods that provide services beyond those that improve the environment.
The factor of production called "labor" can be defined as the:
A. time spent by employees in the production of goods, but not services. B. number of worker-hours a business uses at a given time. C. fraction of total costs spent on people. D. number of people a business has access to at any given time.