In the short run, nominal wages and other input prices are assumed to be:
A) Unresponsive to product price-level changes, but in the long run they are assumed to be responsive
B) Unresponsive to product price-level changes, and in the long run they are assumed to be unresponsive also
C) Responsive to product price-level changes, but in the long run they are assumed to be unresponsive
D) Responsive to product price-level changes, and in the long run they are assumed to be responsive also

Question

Quizplus · Accepted Answer

In the short run, nominal wages and input prices are typically sticky and do not respond immediately to changes in the price level. However, in the long run, they are assumed to adjust and become responsive to changes in the price level.

In the Short Run, Nominal Wages and Other Input Prices