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babunello [35]
3 years ago
5

The sticky-price theory of the short-run aggregate supply curve says that if the price level rises by 5% while firms were expect

ing it to rise by 2%, then some firms with high menu costs will have:________.
Business
1 answer:
Ne4ueva [31]3 years ago
4 0

Answer:

<u>to keep their prices the same</u>

Explanation:

Remember, having a higher Menu cost implies that such a firm would suffer more if it adjusted its prices.

So the sticky-price theory makes the assumption that a firm that notices an increase in the prices of their products would <em>keep their prices low</em> out of fear that doing so would result in losses for the firm if demand changes negatively.

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Answer:

The correct answer is C.

Explanation:

Giving the following information:

Cash inflows:

Year 1= $11,000

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Year 3= $36,000

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FV= PV*(1+i)^n

Isolating PV:

PV= FV/(1+i)^n

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3 years ago
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Answer:

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