The Existence of Menu Costs Are Often Used to Explain

question 13

Multiple Choice

The existence of menu costs are often used to explain why

• A)fiscal and monetary policies should be relatively effective.
• B)the price of services, like those provided by restaurants and barbers, rise at a faster rate than the price of goods, like automobiles and clothing.
• C)food prices tend to rise disproportionately rapidly in the consumer price index.
• D)price and wage adjustments will be relatively rapid.
• E) people prefer to look backward, instead of forward, when anticipating the future.

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Definitions:

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