When the General Price Level Rises and Firms Decide Not

question 55

Multiple Choice

When the general price level rises and firms decide not to change their prices in the short run,this can be attributed to

• A) menu costs.
• B) legally binding contracts.
• C) inflexible input prices.
• D) money illusion.
• E) a decline in revenues.

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Definitions:

Terminal Value

The future value of a series of cash flows projected to grow at a steady rate indefinitely, often used in discounted cash flow analysis.

Moral Code

A set of principles or values guiding an individual's distinctions between right and wrong behaviors.

Principles

Fundamental truths or propositions that serve as the foundation for a system of belief, behavior, or reasoning.

Conduct

The manner in which a person behaves, especially in a particular context or situation, reflecting their values, ethics, and professionalism.