Keynesian sticky price models are typically called
A)menu cost models.
B)administered cost models.
C)faulty pricing models.
D)inflation forecasting models.
E)classical models.

Question

Quizplus · Accepted Answer

Keynesian sticky price models are often referred to as menu cost models because they assume that firms face costs (such as printing new menus or changing prices in computer systems) in changing prices. This causes prices to adjust slowly in response to changes in demand or supply, leading to short-term price stickiness.

Keynesian Sticky Price Models Are Typically Called