People Had Been Expecting the Price Level to Be 120

question 5

Multiple Choice

People had been expecting the price level to be 120 but it turns out to be 122.In response Robinson Tire Company increases the number of workers it employs.What could explain this?

• A)both sticky price theory and sticky wage theory
• B)sticky price theory but not sticky wage theory
• C)sticky wage theory but not sticky price theory
• D)neither sticky wage theory nor sticky price theory

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Definitions:

Niche Consumers

A select group of consumers with very specific preferences and needs that are different from the larger market.

Norms

Accepted standards or ways of behaving in a group, society, or culture, which guide the actions and expectations of its members.

Lifestyles

The way in which a person or group lives, including patterns of social relations, consumption, entertainment, and dress.