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    Question

    Based on the sticky-price model, the short-run

    aggregate supply curve will be steeper, the greater the_____
    A target nominal-wage rate. Correct Answer Incorrect Answer
    B target real-wage rate. Correct Answer Incorrect Answer
    C proportion of firms with flexible prices. Correct Answer Incorrect Answer
    D proportion of firms with sticky prices. Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Based on the sticky-price model, the short-run aggregate supply curve will be steeper, the greater the proportion of firms with flexible prices.

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