One Reason Stagflation Is Difficult to Recover from Is Because

question 168

Multiple Choice

One reason stagflation is difficult to recover from is because:

• A) wages are sticky downward.
• B) input prices increase with output prices.
• C) less output requires less inputs to be hired.
• D) prices tend to adjust more quickly downward than upward.

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Definitions:

Suppliers Expect

Anticipations or predictions made by suppliers about future market conditions that can affect production decisions.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, leading to market stability.

Equilibrium Quantity

The amount of products or services that are offered and sought after at the balanced market price.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single entity has the power to significantly influence market prices.