Some Economists Suggest That Because of the Costs of Negotiating

question 130

Multiple Choice

Some economists suggest that because of the costs of negotiating contracts, printing price lists, etc., it is costly for firms to change prices in response to demand changes. This hypothesis is known as the

• A) sticky wage theory.
• B) menu cost theory.
• C) Phillips theory.
• D) Freidman theory.

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Definitions:

Emotional process

The mechanism through which emotions are experienced, expressed, and managed, playing a crucial role in human psychology and interactions.

Legal process

The procedures and activities involved in enforcing the law, including litigation, arbitration, and mediation.

Remarriage

Entering into a new marriage after being divorced or widowed from a previous spouse.

Psychic remarriage

The emotional process of committing to a new partner after emotional detachment from a previous one, without a formal marriage.