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Q. "Although the price levels appear to display short-run stickiness in many countries, a change in the money supply creates immediate demand and cost pressures that eventually lead to future increase in the price level." Discuss.
Answer: The statement is true that the pressures come from three major sources that are excess demand for output and labor and inflationary expectations and raw material prices.
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Q. Given the opportunity to sell at world prices, the marginal (opportunity) cost of selling a ton domestically is what? Answer: $5/ton.
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