1- What is the potential reasons for price stickiness. 2- What is the main aspect of...

1- What is the potential reasons for price stickiness.

2- What is the main aspect of the New Keynesian (NK) model.

3- What is the welfare costs of inflation.

Expert Solution

answer 1

Price thickness means when price cannot adjust immediately to change in economic conditions are in the aggregate price level there is an inefficiency or disc equilibrium in the market.Price thickness is the resistance of market prices to change quickly despite changes in the broad economy that suggest a different price is optimal.the concept of price thickness can also applied to veggies when sales fall in a company company don't resort to cutting wages.

Cause of price stickiness

Price thickness is the the nation that there are adjustment cost associated with changing price. In some cases firms mast print new price list and catalogue and notify customers of prices changes doing this too often code jeoparadize customer relations. Form paper to adjust output and employment in response of changing market conditions living product price alone. Quantity adjustments have costs but forms mein assume that the associated risks are similar than those associated with price adjustments.

Rahul Sunny answered 2 years ago

Discuss potential reasons for price stickiness.

What does “wage and price stickiness” mean? What is its significance in Keynesian analysis?

In what macroeconomic schools of thought does price stickiness play a role? Is it a bad...

In what macroeconomic schools of thought does price stickiness play a role? Is it a bad thing? Explain why

What are the main reasons behind clustering?

 Write down the two main reasons for analysing the model?=?+??+?12  What is ?2 and...

 Write down the two main reasons for analysing the model?=?+??+?12  What is ?2 and why is it important? What does it show us?  Why do we need normality in our data and how can we test for it?  What is heteroskedasticity and why do we need to detect and correct for it when it is present in our model? How do we test for it?  What is autocorrelation, which assumption of the linear model does...

what are the four main parenting style and what aspect of parenting are linked with young...

what are the four main parenting style and what aspect of parenting are linked with young children develpment

1) what are the main events of mitosis ? 2) what are the main events of...

1) what are the main events of mitosis ? 2) what are the main events of meiosis? 3) whay are the main events of the cell cycle ?

1. Describe the main reasons for audit planning.

1. Describe the main reasons for audit planning. 2. Why we have to understand the client's business and industry. 3. Explain the Key parts of planning a audit.

1. What are the reasons for monopoly, (list the standard reasons for barriers to entry)? 2....

1. What are the reasons for monopoly, (list the standard reasons for barriers to entry)? 2. Where do prices come from in a monopoly? 3. How are output and pricing decisions made by a monopolist entrepreneur? 4. How is this different from Perfect Competition? 5. Draw three graphs of a monopoly, one in each of the three situations, a, b, and c and demonstrate how you would choose a price and quantity and discuss what the monopolist would do in...

What is the main objective of taday’s’Just in Time’ Inventory management Systems and cite 2 potential...

What is the main objective of taday’s’Just in Time’ Inventory management Systems and cite 2 potential risks associated with ‘JIT’ Systems.

Question