Because Prices Change Too Slowly in the Short-Run and as a Result

question 36

Multiple Choice

Because prices change too slowly in the short-run and as a result, they do not quickly equalize the quantity demanded and quantity supplied of goods and services, the short-run response of the economy to a demand shock is through:

• A)changes in output and employment levels rather than through changes in prices.
• B)changes in prices rather than through changes in employment.
• C)changes in employment but not in output.
• D)changes in output but not in the employment.

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Definitions:

Grouping

The act of classifying or organizing objects, individuals, or concepts into categories based on shared characteristics or criteria.

Rank Order

A method of arranging items in sequential order based on some criterion, often used in assessments to prioritize or sort data.

Psychodynamic

A psychological perspective that emphasizes the influence of unconscious processes and childhood experiences in shaping behavior and personality.

Counseling

A professional service that offers guidance and assistance to individuals dealing with personal, social, or psychological issues.