(Consider This) The idea that the price level readily moves upward but not downward is called the
A)elevator effect.
B)escalator effect.
C)ratchet effect.
D)stair-step effect.

Question

Quizplus · Accepted Answer

The ratchet effect refers to the phenomenon where prices tend to rise easily but do not fall as readily, similar to a ratchet mechanism that allows movement in one direction only.

(Consider This) the Idea That the Price Level Readily Moves