The Sticky-Price Theory of the Short-Run Aggregate Supply Curve Says

question 86

Multiple Choice

The sticky-price theory of the short-run aggregate supply curve says that if the price level rises by 5% and people were expecting it to rise by 2%,then firms have

• A)higher than desired prices,which leads to an increase in the aggregate quantity of goods and services supplied.
• B)higher than desired prices,which leads to a decrease in the aggregate quantity of goods and services supplied.
• C)lower than desired prices,which leads to an increase in the aggregate quantity of goods and services supplied.
• D)lower than desired prices,which leads to a decrease in the aggregate quantity of goods and services supplied.

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Definitions:

Unionization by Industry

The process through which workers in a specific industry organize to form or join a union to collectively bargain with employers over wages, benefits, and working conditions.

AFL

The American Federation of Labor, a historic federation of labor unions in the United States, known for its influence on the labor movement from the late 19th century through the mid-20th century.

Private Detectives

Professionals hired to conduct investigations, often for private individuals or businesses, to gather information and evidence.

Welfare Capitalism

An economic system that combines a mostly market-based economy with extensive social welfare programs.