Suppose half of firms have sticky prices and half have flexible prices The price level last year was 100 For every $10M output exceeds potential gdp, want to increase their price by 1$ Finally, assume this economy uses adaptive expectations What price do sticky price firms set and what price do fle...

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Suppose half of firms have sticky prices and half have flexible prices. The price level last year

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Suppose half of firms have sticky prices and half have flexible prices. The price level last year was 100. For every $10M output exceeds potential gdp, want to increase their price by 1$.Finally, assume this economy uses adaptive expectations.
1. What price do sticky-price firms set and what price do flexible firms set?

Posted Date: Jun 11, 2024 06:11 PM

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Suppose half of firms have sticky prices and half have flexible prices. The price level last year

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