Both models of aggregate supply discussed in Chapter 13 imply that if the price level is higher than expected, then output natural rate of output.
A)exceeds the
B)falls below the
C)equals the
D)moves to a different

Question

Quizplus · Accepted Answer

When the price level is higher than expected, firms produce more because they perceive higher prices as an increase in demand, leading to output exceeding the natural rate.

Both Models of Aggregate Supply Discussed in Chapter 13 Imply