Contrary to the behavior that would be required to eliminate output gaps, many firms in the economy:

Question

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Many firms adjust their prices only periodically, rather than constantly changing prices in response to short-term changes in demand or supply. This behavior can contribute to output gaps, as prices may not adjust quickly enough to changes in aggregate demand or supply, leading to temporary imbalances between the quantity of goods produced and the quantity demanded at prevailing prices. However, this behavior is also consistent with the fact that many firms face menu costs or other constraints that make it costly or difficult to adjust prices frequently.

Contrary to the Behavior That Would Be Required to Eliminate