Each of the Two Models of Short-Run Aggregate Supply Is

question 79

Multiple Choice

Each of the two models of short-run aggregate supply is based on some market imperfection. In the imperfect-information model, the imperfection is that:

• A) some firms do not adjust their prices instantly to changes in demand.
• B) contracts and arrangements may prevent nominal wages from adjusting rapidly to changing economic conditions.
• C) firms confuse changes in the overall level of prices with changes in relative prices.
• D) the real wage adjusts to bring labor supply and labor demand into equilibrium.

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Definitions:

Systematic Desensitization

A therapy technique used to treat phobias and anxiety by gradually exposing patients to the feared object or situation.

Stimulus Hierarchy

An ordered list of stimuli ranging from least to most likely to elicit a response, used in desensitization therapies and other psychological treatments.

Systematic Desensitization

Systematic desensitization is a therapeutic technique used to gradually expose individuals to their phobias or fears while teaching them relaxation techniques, aiming to reduce anxiety responses.

Learn How to Relax

A process or practice of becoming less tense, anxious, or stressed, often involving techniques such as deep breathing, meditation, or yoga.