In the short run, the price level is assumed to be
A)fixed, along with input prices.
B)flexible, but input prices are not.
C)flexible, along with input prices.
D)fixed, but input prices are flexible.

Question

Quizplus · Accepted Answer

In the short run, the price level is flexible, allowing it to adjust to changes in demand and supply, while input prices are often sticky or inflexible due to contracts and other rigidities.

In the Short Run, the Price Level Is Assumed to Be