In the New Classical Model,all Wages and Prices ________

question 15

Multiple Choice

In the new classical model,all wages and prices ________.

• A)are completely flexible with respect to expected changes in the price level
• B)are fixed with respect to expected changes in the price level
• C)are flexible with respect to the value of the dollar
• D)are fixed with respect to the money supply

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Definitions:

Markup Percent

The fraction of the cost price of items increased to cover operational expenses and secure profit.

Cost

The amount of money required to purchase goods or services or the expenditure incurred in the production of goods.

Markup Percent

The rate applied on top of the buying price of goods to encompass overhead expenses and earn profit.

Cost

The amount of money or resources expended to acquire an asset, produce a product, or provide a service.