If Firms Set Prices and Then Keep Them Fixed for a Period

question 245

Multiple Choice

If firms set prices and then keep them fixed for a period of time, their fixed prices imply that

• A) the aggregate price level is fixed and that aggregate demand determines the quantity of goods and services sold.
• B) prices are set by aggregate demand and supply.
• C) the aggregate price level adjusts continuously.
• D) the aggregate price level is fixed and that aggregate supply determines the quantity of goods and services sold.

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Definitions:

Emotional Intelligence

The awareness of and ability to manage one’s own emotions to facilitate thinking and attain goals, as well as the ability to understand emotions in others.

Traditional Views

Conventional or long-standing beliefs or opinions, often based on historical practices or societal norms.

Goleman

Daniel Goleman, an author, psychologist, and science journalist known for his work on emotional intelligence.

Insight

The capacity to gain an accurate and deep understanding of a person or thing, often leading to a sudden discovery or realization.