The inflation adjustment line is flat because
A) firms cannot change prices in the short run.
B) prices are not responsive to changes in real GDP.
C) the Fed cannot change monetary policy in the short run.
D) prices are not responsive to changes in aggregate demand.
E) firms adjust output first and price later.
Correct Answer:
Verified
Q134: The inflation adjustment line is a flat
Q135: Exhibit 24-5 Q136: If the Fed aims to influence economic Q137: The Fed issues a statement right after Q138: The IA line shows Q140: Suppose the central bank decides to switch Q141: The flat inflation adjustment line describes the Q142: Staggered wage and price setting Q143: Staggered price and wage setting means that Q144: Staggered wage and price setting speeds up
A)the rate of change
A)slows down the
A)inflation
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