People Had Been Expecting the Price Level to Be 170

question 93

Multiple Choice

People had been expecting the price level to be 170 but it turns out to be 165. Diamond Power Tools increases the number of workers it employs. What could explain this?

• A)both sticky price theory and sticky wage theory
• B)sticky price theory but not sticky wage theory
• C)sticky wage theory but not sticky price theory
• D)neither sticky wage theory nor sticky price theory

---

Definitions:

Accommodation

A cognitive process outlined in Jean Piaget's theory of cognitive development, referring to how we alter our existing frameworks or ideas to incorporate new information.

Assimilation

The process by which a person or a group's language and/or culture come to resemble those of another group, often leading to the diminution of the original culture.

Conservation

In cognitive development, the understanding that certain properties of objects, such as volume or mass, remain the same even when their forms or appearances change.

Egocentrism

The cognitive inability to differentiate between one's own perspective and another person's perspective.