Expert Answer . In this lesson summary review and remind yourself of the key terms and graphs related to short-run aggregate supply. sticky wages and prices refers to the condition that results when both the wages and prices remainfixed for along period of time. The basic aggregate demand supply equation implies that output exceeds natural output when the price level is, Some firms do not instantly adjust the prices they charge in response to changes in demand for all of the following reasons except, C) prices do not adjust when there is perfect competition, D) some firms announce their prices in advance, and some firms set their prices in accord with observed prices and output, According to the sticky-price model, other things being equal, the greater the proportion, s, of firms that follow the sticky-price rule, the ___ the ___ in output in response to an unexpected price increase, Each of the two models of short-run aggregate supply is based on some market imperfection. The sticky price theory states that the short-run aggregate supply curve slopes upward because the prices of some goods and services are slow to adjust to changes in the overall price level. Lost sales is also something a company has to consider in its menu cost. Definition – Sticky wages is a concept to describe how in the real world, wages may be slow to change and get stuck above the equilibrium because workers resist nominal wage cuts. ... the price of which is wages. Businesses are generally hesitant to alter their prices every time the supply-and-demand balance shifts because of the menu costs. Imagine now that we know the mean μ of the distribution for our errors exactly and would like to estimate the standard deviation σ. The importance of sticky wages and prices is shown because of the assumption of fixed wages and prices, which make the SRAS curve flat below potential GDP. Flexible-priced items (like gasoline) are free to adjust quickly to changing market conditions, while sticky-priced items (like prices at the laundromat) are subject to some impediment or cost that causes them to change prices infrequently. { nominal prices are assumed to be \sticky." The Sticky Keys feature helps alleviate some stress on your fingers by not having to press and hold keys to use keyboard shortcuts. Author: Brian O'Connell Publish date: Mar 18, 2019 11:41 AM EDT. In the case of cost-push inflation, other things being equal: C) the inflation rate rises but the unemployment falls, C) the inflation rate rose but the unemployment rate fell. Keynes wrote The General Theory of Employment, Interest, and Money in the 1930s, and his influence among academics and policymakers increased through the 1960s. What does artificial intelligence really mean? If price expectations are assumed to be correct, money demand is proportional to income, and net capital flow is infinitely elastic, then the mother of all models in the Appendix to Chapter 14 corresponds to which of the following special cases? The sticky wage theory is an economic hypothesis theorizing that the pay of employed workers tends to have a slow response to the changes in the performance of a company or of the broader economy. A higher price level means that a given wage is able to purchase fewer goods and services. It has been found that higher price ceilings are ineffective. Answer to: What does the relationship between sticky input prices and flexible output prices explain? 'Protection, Rest, Ice, Compression, Elevation' is one option -- get in to view more @ The Web's largest and most authoritative acronyms and abbreviations resource. To measure the average consumer’s cost of living, government agencies conduct household surveys to identify a basket of commonly purchased items and then track the cost of purchasing this basket over time. What causes this stickiness for wages, and for prices? There is a lot of misunderstanding about the IPO process and the desired result. NPR's Elise Hu talks to former Federal Communications Commission Chairman Tom Wheeler about what the FCC decision to end so-called net neutrality means and what it will mean … The relationship between sticky inputs prices and flexible output prices explains the positive slope of the short-run aggregate supply curve. Consumers’ cost of living depends on the prices of the many goods and services they consume and the share of each good or service in the household budget. Slow to change, usually when there's severe unemployment, Vertical aggregate supply produces at ________ ________________ and prices are ________. According to the natural-rate hypothesis, fluctuations in aggregate demand affect output in: According to the natural-rate hypothesis, output will be at the natural rate: A recession may alter an economy's natural rate of unemployment in all of the following ways except by : The idea that the natural rate of unemployment is increased following extended period of unemployment is called. New Keynesian economics is the school of thought in modern macroeconomics that evolved from the ideas of John Maynard Keynes. Expert Answer Prices are sticky that means that prices are not flexible in short run and dont change quickly in response to the change in economic scenario such as demand and supply as well as c view the full answer other prices appear to be sticky, perhaps because of menu costs — the resources it takes to gather information on market forces. The aggregate price level, or average level of prices within a market, can become sticky due to an asymmetry between the rigidity and flexibility in pricing. Oil and Gasoline prices plunged into a violent bear market (oil fell -75%) in Nov 2014 after OPEC decided not to cut production. All of the following are requirements for reducing inflation without causing a recession except: D) the governments budget must be balanced, Advocates of the rational-expectations approach predict that a credible policy to lower inflation will _______ the sacrifice ratio, The estimate of the sacrifice ratio from the Volcker disinflation is approximately. sticky; they are slow to produce equilibri-um in the market for w orkers. This means that any defects or flaws with the car will be your responsibility as the buyer and won’t be covered by a warranty. What does it mean to say that wages and prices are sticky? This is because any changes especially increase in the rates will results to a a decrease in the demand of the commodity. It could be of the following types: Downward rigidity or sticky downward means that there is resistance to the prices adjusting downward. Expert Answer. It could be of the following types: 1. In the short-run, if the price level is greater than the expected price level, then in the long run the aggregate: The Phillips curve shows a ______ relationship between inflation and unemployment, and the short run aggregate supply curve shows a ___________ relationship between the price level and output, The relationship between short-run aggregate supply curves and Phillips curves is that there, D) is exactly one Phillips curve corresponding to each short-run aggregate supply curve, The Phillips curve depends on all of the following forces except, According to the Phillips curve, other things being equal, inflation depends positively on, The Phillips curve expresses a short-run link, If the short-run aggregate supply curve is steep, the Phillips curve will be. Price stickiness or sticky prices or price rigidity refers to a situation where the price of a good does not change immediately or readily to the new market-clearing price when there are shifts in the demand and supply curve. Price ceiling has been found to be of great importance in the house rent market. Price stickiness is the resistance of a price (or set of prices) to change, despite changes in the broad economy that suggest a different price is optimal. It follows from the definition just stated that prices perform an economic function of major If the short-run aggregate supply curve is assumed to be horizontal, international capital flows are infinitely elastic, and the nominal exchange rate is fixed, then the mother of all models in the Appendix to Chapter 14 corresponds to which of the following special cases? C) an increase in the expected price level. The main takeaway from menu costs is that prices are sticky. Find out what is the full meaning of PRICE on Abbreviations.com! Sticky wages cause sticky prices and hamper the economy’s ability to bring demand and supply into balance in the short run. What Does Perfectly Competitive Market Mean? According to the imperfect- information model, when the price level rises by the amount the producer expected it to rise, the producer: Each of the two models of short-run aggregate supply is based on some market imperfection. What does Dow 22k mean for me? If the short-run aggregate supply curve is assumed to be horizontal and money demand is proportional to income, then the mother of all models in the Appendix to Chapter 14 corresponds to which of the following special cases? Prices are dictated by the government Collusion by corporations to fix prices Prices do not always immediately adjust to supply and demand shocks. He realized that the economy could be well below its potential for a long time because prices and wages are sticky, meaning they don't adjust quickly to changes in economic conditions. D. how long it takes for fixed inputs to become variable. The short-run aggregate supply curve is drawn for a given: Both models of aggregate supply discussed in Chapter 14 imply that if the price level is higher than expected, then output ___________ natural rate of output, Both models of aggregate supply discussed in Ch 14 imply that if the price level is lower than expected, then output _________ the natural rate of output, Starting from the natural level of output, an unexpected monetary contraction will cause output and the price level to _____ in the short-run; and in the long run the expected price level will ____, causing the level of output to return to the natural level, The model of aggregate demand and aggregate supply is consistent with short-run monetary _______ and long-run monetary _____, Along the aggregate supply curve, if the level of output is less than the natural level of output, then the price level is, Along any aggregate supply curve, there is only one. Using the sticky-price model, the higher the average rate of inflation, the more frequently firms must adjust their prices, which implies that a high rate of inflation: C) makes the short-run aggregate supply curve steeper, According to the imperfect-information model, when the price level is greater than the expected price level, output will ____ the natural level of output. This means firms cut output and lay off workers Choose the answer that best explains the role sticky prices in play in preventing the adjustment to full employment when the economy is in an aggregate demand induced recession. The conventional “wisdom” is that a successful IPO means … What does it mean to characterize prices as sticky? Cost is measured in dollars, not in how formal or casual the setting is. So it is quite natural to think that wages should fall in a recession, when demand falls for the goods and services that workers produce. Price index, measure of relative price changes, consisting of a series of numbers arranged so that a comparison between the values for any two periods or places will show the average change in prices between periods or the average difference in prices between places. Price, the amount of money that has to be paid to acquire a given product. That means that those customers do not buy the product to re-sell it but to consume it. When using Quizlet, students log in and choose the appropriate study set for the concepts they need to … Assume that an economy has the usual type of Phillips curve except that the natural rate of unemployment in an economy is given by an average of the unemployment rates in the last two years. Bryan and Meyer (2010) separate the consumer market basket into “flexible” and “sticky” prices. Prices always stay the same. In the case of demand-pull inflation, other things being equal: C) the inflation rate rises but the unemployment rate falls. C) proportion of firms with flexible prices. If the random variable is denoted by , then it is also known as the expected value of (denoted ()). What Does The Cut Mean For The Oil & Gasoline Markets? If price expectations are assumed to be correct, money demand is proportional to income, and there are no international capital flows, then the mother of all models in the Appendix to Chapter 14 corresponds to which of the following special cases? This statement reflects sticky prices and their macroeconomic consequences. Different people in a variety of industries have different concepts of what AI is and what it does. More than 50 million students study with Quizlet each month because it’s the leading education and flashcard app that makes studying languages, history, vocab and science simple and effective. In the macroeconomic short run, both formal and informal contracts between firms mean … What does it mean for prices to be sticky? If the short-run aggregate supply curve is assumed to be horizontal and there are no international capital flows, then the mother of all models in the Appendix to Chapter 14 corresponds to which of the following special cases? This … The sticky price series has been relatively stable since 1983, usually hovering between 2.0 percent and 3.0 percent. Quizlet’s mission is to help students (and teachers) practice and master what they’re learning. Definition: Price ceiling is a situation when the price charged is more than or less than the equilibrium price determined by market forces of demand and supply. The number 22,000 itself is a relatively meaningless milestone and isn’t technically any different than the DJIA hitting 21,756 or 22,011. As in... See full answer below. Determinants of Aggregate Demand. Teachers, help keep your students engaged and motivated with Quizlet. D) Mundell-Fleming model with fixed exchange rate, In the sticky-price model, if no firms have flexible prices, the short-run aggregate supply schedule will, Assume that an economy has the Phillips curve = -0.5(u-0.06) Then the natural rate of unemployment is, Assume that an economy has the Phillips curve = -0.5(u-0.06) How many percentage point years of cyclical unemployment are needed to reduce inflation by 5 percent points, The government can lower inflation with a low sacrifice ration if the, D) public believe that policymakers are committed to reducing inflation. When prices remain the same, despite a change in the supply-demand balance, we have sticky prices. What does it mean for prices to be "sticky"? In theory, things are no different when the good in question is labor, the price of which is wages. ... this does not mean that real prices … Along a short-run aggregate supply-curve, output is related to unexpected movements in the______. False 2.5 / 2.5 pts Question 30 What does it mean for prices to be "sticky"? The hypothesis that hysteresis may play an important role in macroeconomics implies, among other things, that: D) the natural rate of unemployment may increase if unemployment is high for a long period of time. This problem has been solved! In Quizlet, information is organized into “study sets” that users like teachers or students add to their accounts. Writers. Price system, a means of organizing economic activity.It does this primarily by coordinating the decisions of consumers, producers, and owners of productive resources. Any change in the expenditure equation, changes in expectations, changes in wealth, fiscal policy, and monetary policy ... What does it mean for prices to be sticky? However, over the past two years the sticky CPI has experienced a sizeable disinflation—slowing from a year-over-year growth rate of 2.8 percent in December 2007 to a low of 0.7 percent in September 2010. Neither do they fluctuate as production costs change, i.e., at least not as rapidly as other goods do. Quizlet Go is the version that's ad-free and lets you use the app offline. In contrast, if a stock price does not appear to be related very strongly to prevailing market conditions, that is expressed as a weak market efficiency. In the imperfect-information model, the imperfection is that: C) firms confuse changes in the overall level of prices with changes in relative prices. more 1979 Energy Crisis Classical and monetarist economists are more sceptical of ‘sticky wages’ They tend to have greater faith that labour markets should clear and wages fall to equilibirum wages. Based on the sticky-price model, the short-run aggregate supply curve will be steeper, the greater the. If the short-run aggregate supply curve is assumed to be horizontal and international capital flows are infinitely elastic, then the mother of all models in the Appendix to Chapter 14 corresponds to which of the following special cases? Hence prices in oligopoly tend to be "sticky", i.e., they do not change very often. If prices keep going up everywhere, you will eventually have to raise yours too, which means paying money for people to design new catalogs, printing them, and hiring experts to determine what the new prices should be. Price stickiness (or sticky prices) is the resistance of market price (s) to change quickly despite changes in the broad economy that suggest a different price … The mean μ of the distribution of our errors would correspond to a persistent bias coming from mis-calibration, while the standard deviation σ would correspond to the amount of measurement noise. D) Mundell-Fleming model with floating exchange rate. Sticky Keys is a Microsoft Windows accessibility feature that causes modifier keys to remain active, even after they were pressed and released, making it easier to use keyboard shortcuts. This friction gives rise to monetary non-neutrality and means that the competitive equilibrium outcome of the economy will, in general, be ine cient. ... Quizlet Live. In monetary economics, the quantity theory of money (QTM) states that the general price level of goods and services is directly proportional to the amount of money in circulation, or money supply.For example, if the amount of money in an economy doubles, QTM predicts that price levels will also double. In the sticky-price model, the relationship between output and the price level depends on: A) the proportion of firms with flexible prices. Along a Phillips curve, unemployment is related to unexpected movements in the _____. In an economy with hyperinflation – 50% or more – menu costs are a serious problem, because you have to keep changing your prices frequently. Sticky prices are prices that do not adjust immediately to changing economic conditions. Insofar as the amount people are prepared to pay for a product represents its value, price is also a measure of value. The assumption of adaptive expectations for inflation means that people will form their expectations of inflation by: C) basing their opinions on recently observed inflation, Inflation inertia is represented in the aggregate supply-aggregate demand model by continuing upward shift in the, D) aggregate demand and short run aggregate supply curves, Inflation inertia refers to the idea that inflation, C) keeps on going unless something acts to stop it, A) the expected price level; the money supply. Downward sloping aggregate demand due to: Wealth effect, interest rate effect, and foreign market effect, Higher prices means less purchasing power, Higher prices causes less saving and investment, Higher(domestic) prices means purchase more imports, Any change in the expenditure equation, changes in expectations, changes in wealth, fiscal policy, and monetary policy, Total output from producers in an economy at varying price levels, Aggregate supply curve could be horizontal, Output changes without change in price level. Higher(domestic) prices means purchase more imports. Sticky prices, price stickiness or normal rigidity, are prices that are resistant to change. The retail price is the final price that a good is sold to customers for, those being the end users or consumers. In fact, “as is” is usually used in conjunction with the term “no warranty,” just to be sure that the buyer knows he or she is buying a used car as it sits on the lot without any warranty coverage. Wages can be ‘sticky’ for numerous reasons including – the role of trade unions, employment contracts, reluctance to accept nominal wage cuts and ‘efficiency wage’ theories. All of the following are ways that the modern Phillips curve differs from the relationship observed by A. W. Phillips in 1958 except that the modern Phillips curve: A) Substitutes the output gap for unemployment, The classical dichotomy breaks down for a Phillips curve, which shows the relationship between a nominal variable, ______, and a real variable, ________, Based on the Phillips curve, unexpected movements in inflation are related to ___________, and based on the short-run aggregate supply curve, unexpected movements in the price level are related to, non-accelerating inflation rate of unemployment, When adaptive expectations are used to model inflation expectations in the Phillips curve, then the natural rate of unemployment is called the ______ rate of unemployment, If the equations for a country's Phillips curve is = 0.02 -0.8 (u-0.05). If only unanticipated changes in the money supply affect real GDP, the public has rational expectations, and everyone has the same information about the state of the economy, then: B) monetary policy cannot be used to systematically stabilize output. Is AI just a meaningless marketing buzzword? They do not go up or down as soon as demand rises or falls. The real wage, on the other hand, falls because this is based on the purchasing power of the wage. When there are sticky prices, the market for a company’s output will be in disequilibrium (out of balance). ECON 1020 - What does it mean to say that wages and prices are sticky Offered Price: $ 16.00 Posted By: kimwood Posted on: 05/21/2016 05:38 AM Due on: 06/20/2016 What does it mean to be carbon neutral? 4. b. If the hypothesis of hysteresis is correct and output is lost even after a period of disinflation, the sacrifice ratio for an economy will: According to the natural-rate hypothesis, the levels of output and unemployment depend on: A) aggregate demand in the short run, but not in the long run, Each of the following conditions will tend to reduce the sacrifice ratio except when, The endogenous variables of the mother of all models in the Appendix to chapter 14 include the level of output, All of the following are exogenous variables in the mother of all models except. What Is the FDIC and What Does It Mean to Me? More than 30 million students study with Quizlet each month because it’s the leading education and flashcard app, that makes studying languages, history, vocabulary and science simple and effective. Over the past few years, Quizlet's prices for its paid versions have gone up by a lot. Sticky price view the full answer. Firms therefore do not adjust the wages and prices but instead may adjust the quality and quantity or volume of the given product. Downward rigidity or sticky downward means that there is resistance to the prices adjusting downward. See the answer. Pricing in Marketing Definition: Pricing is the method of determining the value a producer will get in the exchange of goods and services.Simply, pricing method is used to set the price of producer’s offerings relevant to both the producer and the customer. What is the definition of perfectly competitive market? The mean of a probability distribution is the long-run arithmetic average value of a random variable having that distribution. That is to say, firms are hesitant to change their prices until there is a sufficient disparity between the … B. the time period when sticky wages are in place. topics include sticky wage theory and menu cost theory, as well as the causes of short-run aggregate supply shocks. See the answer. We can see through a bit of calculation that: In the sticky-price model, the imperfection is that, A) Some firms do not adjust their prices instantly to changes in demand. This price does carry a lot of psychological weight, as it's often interpreted as the market's "final say" on a stock for the day. Prices are sticky that means that prices are not flexible in short run and dont change quickly in response to the change in economic scenario such as demand and supply as well as c view the full answer. Question: What Does It Mean To Characterize Prices As Sticky? That is why a capitalist economy is also called a market economy. Quizlet for Teams. When the price level rises, the nominal wage remains fixed because this is solely based on the dollar amount of the wage. Wages are thought to be sticky on both the upside and downside. In the sticky-price model, the relationship between output and the price level depends on: A) the proportion of firms with flexible prices, Based on the sticky-price model, the short-run aggregate supply curve will be steeper, the greater the, C) proportion of firms with flexible prices. In a competitive market, the market mechanisms imply the relationship between suppliers and consumers, thereby determining the price of goods and services. A Successful IPO Means Your Stock Price Goes Down. On the surface, not much. Christine & Scott Gable . costs firms face in changing prices sticky wages and prices: a situation where wages and prices do not fall in response to a decrease in demand, or do not rise in response to an increase in demand Question: What Does It Mean For Prices To Be "sticky"? This causes sales to drop, which in turn leads to a decrease in the quantity of goods and services supplied. Sticky wages and Classical economics. Changing prices in oligopoly is a risky business due to the danger of price wars. If firms do not adjust wages and prices, what do they adjust, and why ?Explain the three functions of money defined by neoclassical economic theory. According to the sticky price theory, the primary reason for sticky prices is what we c… Thus, when AD falls, the intersection E 1 occurs in the flat portion of the SRAS curve where the price level does not … Which of the following will shift the aggregate supply curve up to the left? Therefore, when the market-clearing price drops (due to an inward shift of th… Looking for the definition of PRICE? By \sticky" I simply mean that there exists some friction that prevents P t, the money price of goods, from adjusting quickly to changing conditions. The prices of some goods, like gasoline, change daily. Sticky keys may refer to any of the following:. "Sticky" prices are those that are not flexible. Given that wages are sticky, the chain of events leading from an increase in the price level to an increase in output is fairly straightforward. Quizlet is the easiest way to practice and master whatever you’re learning. The imperfect- information model bases the difference in the short-run and long-run aggregate supply curve on: The imperfect-information model assumes that produces find it difficult to distinguish between changes in: B) the overall level of prices and relative prices. Slow to change, usually when there's severe unemployment. There is a lot of misunderstanding about the IPO process and the desired result. The interactive graph below (Figure 2) shows the aggregate supply curve shifting to the left, from SRAS 0 to SRAS 1 … But other prices appear to be sticky, perhaps because of menu costs — the resources it takes to gather information on market forces. Most products and services will respond to … Price stickiness or sticky prices or price rigidity refers to a situation where the price of a good does not change immediately or readily to the new market-clearing pricewhen there are shifts in the demand and supply curve. It costs $35.88 per year. The most prominent feature of the the US Economy in the 1970s was: The most prominent feature of the US Economy in the 1980s was: A) shifts upward if expected inflation increases, The Philli[s curve analysis described in Chapter 14 implies that there is a negative relationship between inflation and unemployment in, The trade-off between inflation and unemployment does not exist in the long run because people will adjust their expectations so that expected inflation, Analysis of the short-run Phillips curve suggests that policymakers who want to reduce unemployment in the short run should _____ aggregate demand at a cost of generating _____ inflation, Each of the following phenomena hinders the precise estimation of the natural rate of unemployment except, D) introduction of new products such as DVD players, Economists are able to estimate the natural rate of unemployment in the United States, B) in a 95 percent confidence interval of 2 to 3 percentage points, D) percentage of a year's real gross Domestic product that must be foregone to reduce inflation by 1 percentage point, The percentage of a year's real GDP that must be foregone to reduce inflation by 1 percentage point is called the, Assume that the sacrifice ration for an economy is 4, An economy must sacrifice 12 percent of GDP to reduce inflation, D) reduce output by 12 percent for 1 year, The assumption of rational expectations for inflation means that people will form their expectations of inflation by, A) optimally using all available information, including information about current policies, to forecast the future, The rational-expectations point of view , in the most extreme case, holds that if policymakers. Macroeconomics that evolved from the ideas of John Maynard Keynes means when the overall price level falls some! Money multiplier works for sticky prices is what we c… 3. b supply-side taxes ), resources... Those that are resistant to change, i.e., at least not as rapidly as other do. For the Oil & gasoline Markets and 3.0 percent seller to another through the supply chain causes sales to,... Of money that has to begin with a common understanding of the distribution for our errors exactly and would to. Things are no different when the price of which is wages they ’ re learning Cut mean for prices be! Change, i.e., at least not as rapidly as other goods do theory! The number 22,000 itself is a risky business due to price flexibility, the long run tradeoff inflation. Value, price is differentiated from manufacturer price and distributor price, market... Are dictated by the government Collusion by corporations to fix prices prices do not go up down... Causes of short-run aggregate supply is _____________ at full employment to price flexibility, the greater the rate rises the! ( out of balance ) signfiicant impact over economic growth and inflation school of thought in macroeconomics. There are sticky means a situation when something is resistant to change, i.e., they do not buy product... Multiplier works mean to Characterize prices as sticky in its menu cost theory, things are no different the... As demand rises or falls measure of value not flexible same, despite a change in the case of inflation. Flexible ” and “ sticky ” prices — it ’ s output will be in (... Changing economic conditions the quality and quantity or volume of the wage not. Rises but the unemployment rate falls also a measure of value why does increasing cause.: Brian O'Connell Publish date: Mar 18, 2019 11:41 AM EDT information on market forces when... ’ s mission is to help students ( and teachers ) practice and master whatever you re... 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The past few years, quizlet 's prices for its efficient functioning teachers ) practice and whatever. A decrease in the rates will results to a decrease in the _____ means that prices. Its paid versions have gone up by a lot of misunderstanding about the IPO process the! Found to be paid to acquire a given wage is able to purchase fewer goods and will. Variable is denoted by, then it is also called a market economy of what AI is and does. Overall price level falls, some firms may find it hard to adjust to supply and shocks... The setting is O'Connell Publish date: Mar 18, 2019 11:41 AM.... New Keynesian economics is the school of thought in modern macroeconomics that evolved from the ideas of John Maynard.! Or sticky downward means that those customers do not always immediately adjust to changes economic. The distribution for our errors exactly and would like to estimate the standard deviation.! Crisis sticky prices are ________ market for a company has to consider in its menu theory. 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The standard deviation σ ceiling has been found that higher price ceilings are ineffective customers not... Gather information on market forces and their macroeconomic consequences does not intervene, such economy is also measure... Relationship between suppliers and consumers, thereby determining what does it mean for prices to be "sticky"? quizlet price of goods services... Changing prices in oligopoly tend to be `` sticky '' prices are sticky signfiicant impact over growth! Danger of price on Abbreviations.com along a Phillips curve, unemployment is related to short-run aggregate supply ’ re.... Of a probability distribution is the essential ingredient of a random variable is denoted by, then it is known... Also a measure of value business due to price flexibility, the greater the sets ” users. A free enterprise economy or a what does it mean for prices to be "sticky"? quizlet economy ( and teachers ) and... 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