The Sticky-Price Theory of the Short-Run Aggregate Supply Curve Says

question 45

Multiple Choice

The sticky-price theory of the short-run aggregate supply curve says that if the price level rises by 5% and people were expecting it to rise by 2%,then firms have

• A)higher than desired prices which increases their sales.
• B)higher than desired prices which depresses their sales.
• C)lower than desired prices which increases their sales.
• D)lower than desired prices which depresses their sales.

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Definitions:

Labor Resources

The available human workforce; the people available for work and their skills, which are vital for the production of goods and services.

Agriculture

The process of tilling the land, planting crops, and breeding animals to produce food, materials, and various goods.

Investment Obstacles

Challenges or barriers that hinder the allocation of capital into projects or opportunities, potentially restricting economic growth and productivity.

Developing Nations

Refers to countries that are in the process of industrialization and have lower levels of economic prosperity, compared to developed nations.