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.

---

Definitions:

Aqueous Solution

A solution in which water is the solvent and can dissolve a variety of solutes, both ionic and molecular.

Immiscible Liquids

Liquids that do not mix together to form a homogeneous solution, often separating into distinct layers when combined.

Wax

A diverse class of organic compounds that are malleable at room temperature, typically consisting of long-chain alkanes, esters, or a variety of other compounds.

Soap

A substance used for washing and cleaning, produced by the reaction of a fatty acid with an alkali.