Recall the Application About the Behavior of Prices in Retail

question 23

Multiple Choice

Recall the Application about the behavior of prices in retail catalogs to answer the following question(s) .
Economist Anil Kashyap of the University of Chicago examined the prices of 12 selected goods from L.L.
Bean, REI, and The Orvis Company, Inc. Kashyap tracked the prices from the companiesʹ catalogs which
were reissued every six months.
-According to this Application, the prices which were tracked in the retail catalogs exemplified the macroeconomic concept of the short run, a period of time in which

• A)price changes are significant because the aggregate supply curve is vertical.
• B)prices never change because the aggregate demand curve is vertical.
• C)prices change frequently because of changes in aggregate supply.
• D)prices donʹt change very much, implying that aggregate supply is relatively flat.

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Definitions:

Trade Deficit

A situation where a country's imports exceed its exports, indicating that it is buying more goods and services from abroad than it is selling.

Exports

Goods or services sold by a country to buyers in other countries, contributing to the exporting country's gross domestic product.

Imports

Items or services transferred into a country from a foreign location to be sold.

Trade Surplus

A condition where a country's exports exceed its imports, indicating a positive balance of trade.