Recall the Application about the behavior of prices in retail catalogs to answer the following question(s). Economist Anil Kashyap of the University of Chicago examined the prices of 12 selected goods from L.L. Bean, REI, and The Orvis Company, Inc. Kashyap tracked the prices from the companies' catalogs which were reissued every six months.
-This Application examines the concept of
A) the wealth effect.
B) sticky prices.
C) consumer spending habits.
D) stagflation.

Question

Quizplus · Accepted Answer

The application examines the concept of sticky prices, as economist Anil Kashyap of the University of Chicago tracked the prices of selected goods from catalogs that were reissued every six months. Sticky prices refer to the tendency of prices to be slow to adjust to changes in supply and demand conditions in the short run.

Recall the Application About the Behavior of Prices in Retail