A Classical Objection to Keynesian Sticky Price Models Is That

question 60

Multiple Choice

A classical objection to Keynesian sticky price models is that

• A) it is easier for firms to change prices rather than change output.
• B) it is cheaper for firms to change output rather than change prices.
• C) sticky price models are internally inconsistent.
• D) real shocks are more important than nominal shocks.
• E) nominal wages are always fixed.

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Definitions:

Interdependent Relationship

A relationship between individuals or groups that rely on each other equally for resources, support, or benefits.

Modern-day Treaty-making

The contemporary process of formal agreements negotiation and establishment between sovereign states or between nations and international organizations.

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