Which of the Following Statements Best Describes Price Flexibility in the Economy

question 169

Multiple Choice

Which of the following statements best describes price flexibility in the economy?

• A)Prices tend to be sticky in the short run and stuck in the long run.
• B)Prices tend to be just as sticky in the short run as in the long run.
• C)Prices tend to be sticky in the short run but become more flexible over time.
• D)Prices tend to be flexible in the short run but become more sticky over time.

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Definitions:

Accrual Basis

An accounting method where revenue and expenses are recorded when earned or incurred, regardless of when cash is exchanged.

Accounting

The systematic and comprehensive recording of financial transactions pertaining to a business, and the process of summarizing, analyzing, and reporting these transactions to oversight agencies and tax collection entities.

Differences

Differences can refer to discrepancies or variations between two or more items, figures, or concepts in various contexts.

Earnings Per Share

A financial ratio that measures the amount of a company's profit allocated to each outstanding share of common stock, indicating a company's profitability.