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Question
Which of the following statements concerning price rigidity is true?
A) Since the economy experiences continued inflation prices are not rigid.
B) Prices will be rigid when there is unanticipated monetary policy but not when there is anticipated monetary policy.
C) Data has clearly demonstrated that the long run aggregate supply curve is horizontal.
D) When there are demand changes, firms will not change their price because of the costs associated with renegotiating contracts and informing customers of price changes.
Answer
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