The Menu Cost Theory States That

question 35

Multiple Choice

The menu cost theory states that

• A) prices are not fully flexible because it is costly for firms to change prices every time there is a demand change.
• B) economic agents quickly learn the likely responses of the Fed to changes in unemployment.
• C) prices depend only on the input costs.
• D) the economy is characterized by perfect competition.

---

Definitions:

Cannabis

A drug derived from the Cannabis plant, used for recreational or medicinal purposes, known for its psychoactive properties.

Euphoria

A feeling or state of intense excitement and happiness.

Sociability

The tendency or ability to associate with others in a friendly or social manner.

Marijuana

A mind-altering substance derived from the Cannabis plant, utilized either for therapeutic or leisure activities.