If some goods' prices adjust more quickly than others, there is:
A) a perfect short-run allocation of resources
B) a short-run misallocation of resources
C) no inflation
D) a hyperinflation
E) a deflation

Question

Quizplus · Accepted Answer

If some goods' prices adjust more quickly than others, it creates a short-run misallocation of resources since some prices are out of line with their market equilibrium. This implies that some goods will be overproduced while others would be underproduced.  The misallocation results in a suboptimal allocation of resources.

If Some Goods' Prices Adjust More Quickly Than Others, There