savage asked:
8. Which of the following explains why firms and workers fail to predict the future price level accurately?
A. Businesses are often slow to adjust wages.
B. Menu costs make some prices sticky.
C. Predicting the future price level accurately is impossible.
D. Contracts make some wage and prices sticky.
E. All of the choices given here.
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I think it’s (E). There are reasons why expected price differs from actual price:
1.The Sticky-Wage Theory
2.The Sticky-Price Theory
3.The Misperceptions Theory
A,B,C, and D are all examples of those theories.