Why Are the Prices of Some Intermediate Inputs Sticky in the Short

question 49

Essay

Why are the prices of some intermediate inputs sticky in the short run? What causes the stickiness in the prices of labor?

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Definitions:

Direct Method

A cash flow statement presentation method that shows actual cash flows from operating activities, detailing specific sources and uses of cash, as opposed to the indirect method which adjusts net income for non-cash transactions.

Dividends

Regular payments made by a corporation to its shareholders out of its profits or reserves.

Financing Activities

Transactions that result in changes in the size and composition of the equity and borrowings of an entity.

Marketable Securities

Financial instruments that are easily convertible into cash and are therefore considered very liquid.