The Higher the Average Rate of Inflation, the More Frequently

question 39

Multiple Choice

The higher the average rate of inflation, the more frequently firms must adjust their prices, which implies that a high rate of inflation:

• A)has no effect on the slope of the short-run aggregate supply curve.
• B)should make the short-run aggregate supply curve flatter.
• C)makes the short-run aggregate supply curve steeper.
• D)causes prices to be sticky.

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