Because Not All Prices Adjust Instantly to Changing Circumstances,an Unexpected

question 183

True/False

Because not all prices adjust instantly to changing circumstances,an unexpected fall in the price level leaves some firms with higher-than-desired prices,and these higher-than-desired prices depress sales and induce firms to reduce the quantity of goods and services they produce.

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Definitions:

Units of Labor

Refers to the measurement of labor force involvement, typically in terms of person-hours or person-years.

Inputs Hiring

The process of acquiring the necessary resources, such as labor and raw materials, required for the production of goods or services.

Monopoly and Monopsony

A market structure where a single company dominates the supply side as a monopoly, or the buying side as a monopsony, of a market.

Resource Markets

Markets where productive inputs like labor, raw material, and capital are bought and sold.