People Had Been Expecting the Price Level to Be 170

question 93

Multiple Choice

People had been expecting the price level to be 170 but it turns out to be 165. Diamond Power Tools increases the number of workers it employs. What could explain this?

• A)both sticky price theory and sticky wage theory
• B)sticky price theory but not sticky wage theory
• C)sticky wage theory but not sticky price theory
• D)neither sticky wage theory nor sticky price theory

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