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Debora [2.8K]
3 years ago
10

The sticky-price theory helps explain what feature of the aggregate demand and aggregate supply model?

Business
1 answer:
zhuklara [117]3 years ago
7 0

Answer:

The stick price theory helps to explain the upward sloping shape of the aggregate supply curve.

Explanation:

The price tends to be sticky for a number of reasons.  

  1. Firms will need to incur menu costs if they constantly change prices
  2. Frequent change in prices may annoy the customers
  3. The wage rates remain the same even after change in price because the  wages are based on contracts

The short-run aggregate supply curve is upward sloping because of the stickiness of price, there is a positive and direct relationship between output and price. Due to the high expected price level in the short run, the firms will expect the input prices to rise along with an increase in the product price.  

To counter the increase in inputs price, the product price is kept high. The higher price provides motivation to produce more. That's why the short-run aggregate supply curve is upward sloping.

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Answer:

of which country!!!!!!!!!!!!!!!!!!!

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3 years ago
Bill heard, as part of the _____ curriculum in his school, that certain races were not as good as others, and that coolness was
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3 years ago
The Grind coffee shop offers drink cards to purchasers of its gourmet coffees with ten spaces. The cashier punches one space wit
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6 0
2 years ago
Adam Smith found that having employees focus on one task instead of many was more successful than having them learn a number of
Lunna [17]

Answer:

specialization

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Labor specialization was the basic idea behind Henry Ford's moving assembly line. Each specialized worker was responsible for one manufacturing task and that decreased total production time and cost. The same concept applies today and the results are still the same.

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3 years ago
The difference between production possibilities frontiers that are bowed out and those that are linear is that a. bowed out prod
salantis [7]

Answer:

b

Explanation:

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The PPC is concave to the origin. This means that as more quantities of a product is produced, the fewer resources it has available to produce another good. As a result, less of the other product would be produced. So, the opportunity cost of producing a good increase as more and more of that good is produced.  

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