The overall behavior of the economy
A) is remarkably stable over time.
B) differs over time as prices become increasingly ﬂexible in the months and years following a shock.
C) differs over time as prices become increasingly sticky in the months and years following a shock.
D) is easily controlled and stabilized by government policy.

Question

Quizplus · Accepted Answer

The overall behavior of the economy changes over time, particularly as prices adjust to economic shocks. Initially, prices may be sticky, but they become more flexible over time, allowing the economy to adapt and change. This flexibility in prices over time contributes to the economy's dynamic nature, differing from the initial impact of a shock.

The Overall Behavior of the Economy