How Does the Distinction Between Flexible and Sticky Prices Affect

question 1

Multiple Choice

How does the distinction between flexible and sticky prices affect the study of macroeconomics?

• A) The study of flexible prices is confined to microeconomics,while macroeconomics focuses on sticky prices.
• B) Macroeconomists use flexible prices to explain inflation and sticky prices to explain unemployment.
• C) Flexible prices are typically assumed in the study of the long run,while sticky prices are assumed in the study of the short run.
• D) Endogenous variables are measured using flexible prices,while exogenous variables are measured using sticky prices.

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