The Sticky-Price Theory Implies That

question 15

Multiple Choice

The sticky-price theory implies that

• A)the short-run aggregate-supply curve is upward-sloping.
• B)an unexpected fall in the price level induces firms to reduce the quantity of goods and services they produce.
• C)menu costs influence the speed of adjustment of prices.
• D)All of the above are correct.

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Definitions:

Intermediary Banks

Financial institutions that serve as a middleman between the payer and the payee in transactions, particularly in international wire transfers.

Payment Orders

Instructions to transfer money from one bank account to another, often used in international trade and electronic funds transfers.

Fund Transfer

The movement of money from one account to another, either within the same financial institution or across different ones.

Certified Check

A check for which the issuing bank guarantees the availability of funds by verifying the drawer's signature and setting aside the check amount, thus ensuring payment.