In a study of whether prices are sticky or not, Alan Blinder supervised interviews of corporate executives on the frequency with which their firms change prices and found that
a. 55 percent of firms changed prices only once a year or less.
b. over 20 percent of the firms changed prices more than 12 times per year.
c. 10 percent of companies changed prices 4 to 12 times per year.
d. there is not a considerable departure from auction-market behavior.
A
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In the figure below, draw a short-run Phillips curve and a long-run Phillips curve if the expected inflation rate is 4 percent and the natural unemployment rate is 6 percent
Explain how the two change in the short run if: a. slower growth in aggregate demand causes a recession. b. the inflation rate increases. c. the natural unemployment rate increases.
Openness and change in the economic models of India and China have meant for the world economy all of the following EXCEPT
A) hundreds of millions of people have escaped poverty. B) many manufactured goods and services have become cheaper. C) forced some firms to downsize, offshore or otherwise change business practices. D) increased the market power of firms in industrialized countries as they gained most from this evolving trade.