Contrary to behavior that would be required to eliminate output gaps, many firms in the economy:
A)intentionally set prices below equilibrium prices in order to create shortages.
B)adjust their prices only periodically.
C)have fully-flexible prices that change constantly.
D)only change the amount of output they produce in the long run, not in the short run.

Question

Quizplus · Accepted Answer

Prices are "sticky" in many cases, which reduces the economy's ability to adapt to changing demand conditions.

Contrary to Behavior That Would Be Required to Eliminate Output