The So-Called Ratchet Effect Refers to the Characteristic in the Economy

question 128

Multiple Choice

The so-called ratchet effect refers to the characteristic in the economy where product prices, wages, and per-unit production cost are flexible when

• A)AD decreases but not when AD increases.
• B)AD increases but not when AD decreases.
• C)AS increases but not when AS decreases.
• D)AD shifts but not when AS shifts.

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Definitions:

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