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Question 36 (2.5 points)

Sticky prices:
A. Will become less sticky over time (the long run).
B. Become stickier over time (the long run).
C. Mean recessions will end quickly.



Answer :

GinnyAnswer

Final answer:

Sticky prices in economics are prices that adjust slowly to their equilibrium level, impacting employment and causing economic downturns.


Explanation:

Sticky prices refer to prices that are slow to adjust to their equilibrium level, causing shortages or surpluses, which can lead to unemployment and recessions due to wage and price stickiness in markets. In the long run, prices are expected to be more flexible than in the short run, allowing for adjustments leading to natural levels of employment and output.


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