Each of the following is a possible reason why prices are sticky except
A) managers and workers find that changing prices or renegotiating wages is costly.
B) managers and workers lack information and so confuse changes in total economywide spending with . changes in demand for their specific products.
C) the level of prices is as much a physical as well as an economic variable.
D) managers and workers suffer from "money illusion."

Question

Quizplus · Accepted Answer

Prices being sticky refers to the resistance of prices to change, despite changes in the broad economy. This concept is rooted in economic and behavioral factors, not physical ones. Options A, B, and D all relate to economic and psychological reasons why prices might not adjust quickly, such as the costs associated with changing prices, lack of information, or the misinterpretation of monetary value (money illusion). Option C, suggesting that prices are a physical variable, does not align with the economic understanding of price stickiness.

Each of the Following Is a Possible Reason Why Prices