With a nominal price rigidity, firms cannot change the market clearing price.

Name: With a nominal price rigidity, firms cannot change the market clearing price.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Nominal price rigidity refers to a situation where firms are unable to adjust their prices in response to changes in market conditions or costs. This means that they cannot change the market clearing price, which is the price at which quantity supplied equals quantity demanded. Therefore, the answer is true.

With a Nominal Price Rigidity, Firms Cannot Change the Market