Rigidities That Diminish Wage and Price Flexibility Such as Long-Term

question 11

Multiple Choice

Rigidities that diminish wage and price flexibility such as long-term contracts suggest that an increase in the expected price level

• A)might not translate into complete adjustment of wages and prices.
• B)might cause aggregate demand to decrease.
• C)might cause aggregate supply to increase.
• D)will have no effect on the short-run aggregate supply curve.

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Definitions:

Operational Planning

The process of planning short-term actions and strategies to achieve goals and objectives set by strategic planning.

Budgeting

The process of creating a plan to spend your money, allowing an individual or organization to determine in advance whether they can afford the necessary expenditures.

Strategic Plans

Strategic plans are comprehensive outlines detailing an organization's goals, priorities, and actions designed to achieve long-term objectives.

Annual Operating Plans

Detailed plans that outline the goals, strategies, and activities for an organization for the upcoming fiscal year.