Final answer:
According to Alan Blunder's survey, the most accepted theory of price stickiness by firms was the rational expectations theory, which posits that with full information, firms and individuals will anticipate future economic conditions, leading to rapid economic adjustments.The correct answer is option B.
Step-by-step explanation:
The question asks which theory of price stickiness was most accepted by firms according to Alan Blunder's survey. Based on the given information, we can deduce that the rational expectations theory is the one that suggests that economic adjustments, including those in prices and wages, can occur very quickly if individuals form the most accurate possible expectations about the future.
This theory implies that people use all available information to predict future economic conditions. Moreover, the rational expectations framework assumes that if the aggregate supply curve is vertical over time, shifts in aggregate demand will primarily affect prices rather than output and employment in the long term.
Firms and workers, knowing this, will act promptly, leading to rapid price adjustments without the need for prolonged short-run fluctuations in output and employment.The correct answer is option B.